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HISTORY  OF 

THE  SAVINGS  BANKS  ASSOCIATION 

OF  THE  STATE  OF  NEW  YORK 


V 


1.  liinvARn  S.  Dawson,  President  Onondaga  County  Savings  Bank,  Syracuse,  N.  Y. 

2.  J.  MowAKO  KiNC,  President  Albany  Savings  Bank,  Albany,  N.  Y. 

3.  Mkkritt  Trimble,  President  The  Bank  for  Savings  in  the  City  of  New  York. 

4.  koiiKRT  S.  I)f)NALUSON',  President  Krie  County  Savings  Bank,  HulTalo,  N.  Y. 

5.  John  Haksen  Rhoahes,  President  The  Greenwich  Savings  Bank,  New  York  City. 

6.  \Vm.  C.  Stirc-.es,  President  Seamen's  Bank  for  Savings,  City  of  New  York. 

7.  Andrew  Mills,  President  Dr>'  Dock  Savings  Institution,  New  York  City. 

8.  Aduison  C.  Miller,  President  The  Savings  Bank  of  Utica,  Utica,  N.  Y. 

9.  Samuel  R.  Rainev,  President  Hudson  City  Savings  Institution,  Hudson,  N.  Y. 

10.  James  McMaiion,  President  Emigrant  Industrial  Savings  Bank,  New  York  City. 

11.  John  D.  Hicks,  President  The  Bowery  Savings  Bank,  New  York  City. 

12.  William  Ci.  Conklin,  President  Franklin  Savings  Bank,  New  York  City. 


HISTORY 


qA^'TX        RANKS 


OF  T 


1894-1914 


By 
FREDERIC  B.  STEVENS 

SECRETARY  OF  THE  ASSOCIATION 
I9IO-I913 


''Thrift  Is  the  Soul  of  Prosperity'' 


Garden  City        New  Yokk 

>  v; ■  n \  p !-\ 4 Y    Page  &  ^  i"^Mpir\iv 


HISTORY 

OF 

THE  SAVINGS  BANKS 
ASSOCIATION 

OF  THE  STATE  OF  NEW  YORK 
1894-1914 


By 
FREDERIC  B.  STEVENS 

SECRETARY  OF  THE  ASSOCIATION 
I9IO-I913 


^'Thrift  Is  the  Soul  of  Prosperity'^ 


Garden  City        New  York 

DOUBLEDAY,  PaGE  &  CoMPANY 
I9IS 


COPYRIGHTED,    I915 

BY 

FREDERIC  B.  STEVENS 


TO  THE  MEMORY 

OF 

MY  FATHER 

ALBERT  PARSONS  STEVENS 


ONE    OF    THE    FOUNDERS,  AND    FOR    THIRTY-FIVE 

YEARS  SECRETARY-TREASURER,  OF  THE  NATIONAL 

SAVINGS  BANK  OF  THE  CITY  OF  ALBANY, 

THIS  VOLUME   IS  AFFECTIONATELY 

DEDICATED  BY  THE  AUTHOR 


Statistics  of  the  140  Savings  Banks  in  the  State  of  New 
York,  on  Thursday.  January  i,  IQ14* 


Total  resources ^1,926,334,331.76 

Amount  due  depositors 1,741,697,466.53 

Other  liabilities 691,817.64 

Surplusoninvestment  value, stocks  and  bonds  183,947,047.59 

"  market            "          "        "       "  116,789,006.19 

"  par                  "          "        "       "  157730,038.55 

Amount    deposited    during  year,    excluding 

interest 439,923,632.03 

Amount  withdrawn  during  year 448,273,900.51 

of  interest  credited  and  paid  for  year  60,611,029.90 

"        salaries  paid  during  year    ....  3,061,263.55 

"        expenses  other  than  salaries  for  year  3,123,918.39 

Number  of  open  accounts 3,143,444 

"         "  accounts  opened  or  reopened  during  year        567,077 
"         "         "        closed  during  year 488,528 

'  Figurej  taken  from  the  annual  report  of  ike  Superintendent  of  the  Banking  Department  of  the 
State  of  New  York  for  the  year  1913. 


FOREWORD 

THE  purpose  of  this  volume  is  to  illustrate  the 
growth  and  power  of  an  IDEA.  That  idea,  origi- 
nating in  the  fertile  brain  of  Daniel  Defoe,  the  author 
of  the  immortal  story  of  "Robinson  Crusoe,"  and  taken 
up  by  such  pioneers  as  the  Rev.  Joseph  Smith  and  Mrs. 
Priscilla  Wakefield,  in  England,  the  Rev.  Dr.  Henry 
Duncan,  in  Scotland,  and  by  Col.  Condy  Raguet,  one  of 
the  founders  of  the  Philadelphia  Savings  Fund  Society, 
and  Thomas  Eddy,^  in  America,  fimds  its  happy  fruition  in 
the  Mutual  or  Trustee  Savings  Bank  as  we  know  it  to-day, 
an  institution  founded  in  pure  benevolence  and  free  from 

'It  is  known  that  Mr.  Eddy  was  a  regular  correspondent  of  Colquhoun,  from 
whom  he  received  valuable  suggestions  which  he  proceeded  to  put  into  prac- 
tical effect.  Mr.  Eddy  was  chairman  of  a  meeting  of  citizens  which  was  held 
in  the  "City  Hotel,"  New  York,  on  Friday  evening,  November  29,  1816,  pur- 
suant to  public  notice.  As  a  result  of  this  meeting  and  of  another  conference  of 
citizens  earnestly  interested  in  improving  the  condition  of  the  poor  and  seeking 
to  benefit  the  industrial  and  labor  classes  held  at  the  New  York  Hospital, 
December  16,  1817,  at  which  it  was  resolved  to  organize  a  society  for  the  preven- 
tion of  pauperism,  it  was  decided  to  establish  a  Savings  Bank  in  the  City  of  New 
York.  The  following  is  an  extract  from  the  Evening  Post  of  New  York,  of  Mon- 
day, December  2,  1816,  quoted  in  "A  History  of  Savings  Banks  in  the  State  of 
New  York,  from  Their  Inception  in  1819  down  to  1869,"  by  Emerson  W.  Keyes, 
Deputy  Supt.  of  the  Banking  Department,  undoubtedly  referring  to  the  first 
meeting  for  the  purpose  of  estabhshing  a  Savings  Bank  in  New  York,  suggested 
by  Mr.  Eddy  after  receiving  a  letter  from  Mr.  Colquhoun: 

"At  a  meeting  of  a  number  of  citizens  convened  in  the  assembly  room  of 
the  City  Hotel,  on  Friday  evening,  November  29,  1816,  pursuant  to  public 
notice,  for  the  purpose  of  establishing  a  Savings  Bank,  Thomas  Eddy,  Esq., 
was  called  to  the  chair,  and  J.  H.  Coggeshall,  Esq,  appointed  secretary. 
The  object  of  the  meeting  having  been  stated,  and  the  principles  of  the  pro- 
posed institution  briefly  and  pertinently  explained  by  Mr.  James  Eastbum, 
on  motion  of  Mr.  John  Griscom,  seconded  by  Dr.  Watts,  it  was  resolved  that 
it  is  expedient  to  establish  a  Savings  Bank  for  the  City  of  New  York." 

Andrew  Warner  Esq.,  one  time  Secretary  of  the  Institution  for  the  Savings 
of  Merchants'  Clerks  in  the  City  of  New  York,  who  gave  Mr.  Keyes  much 
valuable  information  relative  to  the  inception  of  Savings  Banks  in  New  York, 
says:  "The  institution  (the  Bank  for  Savings,  incorporated,   1819)   owes  its 


i.^a.^ 


viii  FOREWORD 

the  slightest  taint  of  human  selfishness.^  Savings  Banks 
have  been  aptly  styled  the  "Granaries  of  the  Poor," 
and  the  phrase  is  fairly  descriptive,  with  this  addition, 
that  after  sufficient  accumulations  have  been  made,  the 
funds  deposited  are  loaned  out  to  worthy  borrowers  upon 
high-class  security,  thus  vastly  increasing  their  poten- 
tiality for  good. 

Turning  for  a  moment  from  the  frivolities  of  life,  we 
can  here  read  of  the  magical  growth  of  Defoe's  IDEA,  a 
thought  developed  into  a  system,  a  penny  grown  into 
millions,  a  people  educated  from  poverty  to  competence 
— in  a  word,  an  IDEA  developed  into  a  vast  army  of  more 
than  Three  Millions  of  Depositors  in  the  Empire  State! 
One  wall  find  here  most  interesting  details  of  the  methods 
by  which  this  great  army  of  depositors — the  real  bone 
and  sinew  of  the  State — have  been  inspired  to  better 
standards  of  H\Tng  by  contact  with  noble,  philanthropic  men 
w^ho,  serv'ing  as  trustees  without  compensation,  have  made 
it  possible  for  these  institutions,  backed  by  the  majesty  of 
the  law,  to  educate  millions  in  thrift  and  industry,  to  lead 
them  in  paths  of  virtue,  prosperity,  and  happiness. 

This  volume  aims  to  give  a  concise  and  authentic  re- 
sume of  the  work  accomplished  by  The  Savings  Banks 

origin,  undoubtedly,  to  Thomas  Eddy,  as  is  evident  from  extracts  of  corres- 
pondence published  in  his  life,  by  Samuel  L.  Knapp,  1834." 

It  seems  to  be  well  settled  that  Savings  Banks  in  New  York  State  owe  their 
origin  to  the  "New  York  Society  for  the  Prevention  of  Pauperism,"  and  that 
John  Griscom  was  a  prime  mover  not  only  in  that  society,  but  also  in  organizing 
Savings  Banks.  In  this  movement,  therefore.  New  York  was  in  the  van,  al- 
though, for  various  reasons,  one  of  which  was  the  failure  of  the  Legislature  to 
pass  the  necessary  act  of  incorporation,  there  was  a  delay  of  something  over  two 
years,  after  the  preliminary  meetings,  before  the  first  institution  was  incorpo- 
rated. Leading  cities  in  other  States,  notably  Boston,  Philadelphia,  and  Balti- 
more, were  able  to  secure  more  prompt  action  by  the  Legislature,  thus  securing 
the  honor  of  being  first  in  the  field. 

'It  is  claimed  on  behalf  of  Patrick  Colquhoun,  a  local  magistrate  in  London, 
England,  that  he  was  the  first  in  that  country  to  make  public  announcement 
of  a  practical  scheme  for  the  organization  of  Savings  Banks,  and  that  his  cor- 
respondence with  bankers  and  others  in  this  country  gave  a  most  powerful 
impulse  to  the  movement  in  America. 


FOREWORD  ix 

Association  of  the  State  of  New  York,  from  its  inception 
in  the  year  1S94  to  date,  a  period  of  twenty  years. 

The  founders  of  this  Association  builded  better  than 
they  knew;  even  the  most  sanguine  among  them  could 
not  have  conceived  the  greatness  of  the  work  it  was 
destined  to  accomphsh.  While  it  is  axiomatic  that  "in 
union  there  is  strength,"  this  is  particularly  true  of  finan- 
cial institutions,  between  which,  though  widely  separated 
as  to  territory,  there  is  a  subtle  interrelation  which  it  is 
difficult  if  not  impossible  to  analyze  or  define.  Thus  it 
has  come  about  that  the  127  Savings  Banks  now  embraced 
within  this  Association  have  been  able  to  accomplish 
vastly  more  than  would  have  been  possible  had  each 
acted  upon  individual  initiative.  And  in  doing  this, 
they  have  aided  materially  in  bringing  hope  and  gladness 
into  thousands  of  homes  where  otherwise  might  have 
been  poverty,  squalor,  and  untold  suffering. 

It  is  impossible  to  look  over  the  Proceedings  of  the 
Association  without  realizing  in  some  degree  what  a 
wealth  of  valuable  material  is  contained  in  them.  Some 
of  the  most  eminent  men  in  the  country  in  the  fields  of 
banking  and  finance  have,  from  time  to  time,  honored 
the  Association  with  their  presence  and  given  its  members 
the  benefit  of  their  experience — men  of  national  reputa- 
tion, such  as  Prof.  William  G.  Sumner,  of  Yale;  Hon. 
Edward  Atkinson  and  Col.  Thomas  Wentworth  Higgin- 
son,  of  Boston;  former  Comptroller  of  the  Currency, 
William  L.  Trenholm;  former  Secretary  of  the  Treasury, 
Charles  S.  Fairchild;  Hon.  Horace  White,  of  Syracuse; 
Hon.  Carroll  D.  Wright  and  Col.  William  Carey  Sanger, 
of  Washington;  Hon.  Wheeler  H.  Peckham  and  Hon. 
Stewart  L.  Woodford,  of  New  York.  Add  to  this  the  ad- 
dresses of  successive  Superintendents  of  the  Banking  De- 


X  FOREWORD 

partment  of  the  State  during  the  period  referred  to,  and 
the  illuminating  discussions  among  the  members  of  the 
Association,  including  as  they  do  practically  aU  the  most 
prominent  Savings  Bank  experts  and  managers  of  the 
State,  and  we  see  at  once  how  happy  a  thought  it  was  to 
organize  this  Association.  To  select  in  all  cases  the  most 
interesting  and  valuable  matter  thus  contributed  was  by 
no  means  easy,  and  no  claim  is  made  that  it  might  not 
have  been  better  done  by  others  of  riper  judgment  and 
wider  experience.  If  it  be  true  that  the  best  way  to  study 
history  is  to  read  biography,  then  perhaps  the  best  way  to 
study  the  history  of  this  Association  is  to  become  famiHar 
with  the  ideas  and  principles  of  those  men  who  are  and 
have  been  the  leaders  in  this  great  work  of  philanthropy. 

Such  a  work  as  this  would  not  fulfil  its  true  mission 
without  due  recognition  of  the  wisdom  and  eloquence  of 
Mr.  John  Harsen  Rhoades,  the  real  father  and  founder 
of  the  Association,  the  untiring  industry  of  Mr.  Samuel 
R.  Rainey,  the  \\'ise  conservatism  of  Mr.  Andrew  Mills, 
the  faithful  service  of  Mr.  William  G.  Conklin,  and  the 
legal  ability  of  Mr.  Charles  A.  jNIiller.  All  have  played 
prominent  parts,  and  credit  should  be  given  where  credit 
is  due.  When  some  of  the  pioneers  have  "fallen  asleep," 
their  sturdy  sons  have  taken  up  the  work  with  renewed 
energy  and  youthful  enthusiasm.  There  have  also  been 
formed  and  cemented  friendships  that  can  be  severed  only 
with  life's  chain. 

I  desire  to  gratefully  acknowledge  the  valuable  assist- 
ance in  the  preparation  of  this  volume  given  by  the  late 
Wilbur  W.  Worlock  and  by  Mr.  Charles  J.  Hailes.  Only 
their  zealous  cooperation  rendered  the  accomplishment  of 
the  task  possible. 
Albany,  Dec.  22,  1914.  Frederic  B.  Stevens. 


TABLE  OF  CONTENTS 

PAGE 

Foreword         ........         vii 

Introductory xxi 

CHAPTER  I 

Reasons  for  the  Formation  of  the  Association — Informal 
Meetings  of  Oii&cers  of  Savings  Banks  to  Exchange  Views  on 
Pending  Legislation  Led  to  Organization  of  Wider  Scope  and 
Influence — Interesting  Discussion  as  to  Status  and  Powers — 
The  Country  Just  Emerging  from  a  Period  of  Severe  Financial 
Stringency — The  Bloodgood  and  Mullin  Bills — Legal  Invest- 
ment of  Deposits — Banks  Represented  at  the  Initial  Meet- 
ing     3 

CHAPTER  II 

Second  Annual  Convention — First  Deaths  Reported  Those 
of  Addison  C.  Miller,  Utica,  and  Harris  G.  Rogers,  Bingham- 
ton — Vigilant  Watching  of  Legislation — The  Elmira  Savings 
Bank  Case — Uniformity  in  Bank  Bookkeeping — An  Illuminat- 
ing Discussion  of  an  Important  Subject — Views  of  President 
Rhoades  ........         30 

CHAPTER  III 

Third  Annual  Convention — Return  of  Prosperity  Delayed 
by  the  Spread  of  Financial  Heresies — Trade  Paralyzed  and 
Commerce  Stagnated — ^The  Association  Rallied  to  the  Gold 
Standard — Mr.  McMahon's  Resolution — Effect  of  Derange- 
ment of  the  Currency  upon  the  Savings  Banks — More  Objec- 
tionable Bills  Killed  in  Their  Inception — Notable  Address  of 
Superintendent  Kilburn,  of  the  Banking  Department — Mr.  S. 
R.  Rainey's  Services  Suitably  Recognized — Important  Topics 
Discussed  ........         39 


xii  TABLE  OF  CONTENTS 


CHAPTER  IV 

Fourth  Annual  Convention — Perils  of  Repudiation  and  In- 
flation Escaped — Danger  in  too  Rapid  Increase  of  Municipal 
Debts — Bonds  Authorized  for  Greater  New  York — The  Taxa- 
tion of  Sa\dngs  Bank  Deposits — Notable  Addresses  by  Super- 
intendent Kilburn,  ex-Comptroller  of  the  Currency  Wm.  L. 
Trenholm  and  Hon,  Edward  Atkinson,  of  Boston  .       63 

CHAPTER  V 

Fifth  Annual  Convention — War  with  Spain — Still  Disor- 
dered Condition  of  Monetary  System — Questions  Relating  to 
the  Taxation  of  Savings  Bank  Deposits — Committee  of  the  As- 
sociation Sent  to  Washington  to  Prevent  Adverse  Legislation — 
Notable  Address  on  "Sound  Money,"  by  Judge  M.  L.  Craw- 
ford, of  Dallas,  Tex. — Postal  Savings  Banks  Discussed — Reso- 
lutions Favoring  Currency  Reform  Legislation — Closer  Rela- 
tions with  Savings  Banks  of  Other  States  Advocated       .     109 

CHAPTER  VI 

Sixth  Annual  Convention — Movement  Toward  the  Enlarge- 
ment of  the  Scope  of  Savings  Bank  Investments — Successful 
Efforts  to  Eliminate  all  Reference  to  Savings  Banks  in  "War 
Revenue  Bill,"  as  It  Passed  Congress — Taxation  of  Deposits — 
Lessening  the  Number  of  So-called  "Dormant  Accounts" — 
Address  of  Superintendent  Kilburn — "The  Relation  of  Savings 
Bank  Deposits  to  General  Business,"  by  Hon.  Charles  S.  Fair- 
child — "The  Power  and  Beneficence  of  Capital,"  by  Prof.  Wm. 
G.  Sumner,  of  Yale  University — Special  Meeting  Called  to  Act 
on  the  So-called  "Stranahan  Bill" — Legislative  Hearing  on 
Tax  Bill    .         .         .         .         .         ,         .         .         .     143 

CHAPTER  VII 

Seventh  Annual  Convention— Retirement  of  President  John 
Harsen  Rhoades  After  Six  Years  of  Distinguished  and  Valuable 
Service — Death  of  Samuel  R.  Rainey,  Chairman  of  the  Execu- 
tive Committee — Appropriate  Action  Taken — Address  of  Hon. 


TABLE  OF  CONTENTS  xiii 

CarroU  D.  Wright,  of  Washington,  on  "  Savings  Institutions  as 
a  Social  Force" — Col.  Thomas  Wentworth  Higginson's  Illu- 
minating Address  on  the  "Aristocracy  of  theDollar" — Remarks 
of  Hon.  Wheeler  H.  Peckham  .     .....     185 


CHAPTER  VIII 

Eighth  Annual  Convention — President  Andrew  D.  Mills  in 
the  Chair — Brief  Review  of  the  Past  Year's  Progress — An- 
nouncement of  the  Death  of  J.  Howard  ICing,  President  of  the 
Albany  Savings  Bank — The  Surplus  or  Guarantee  Fund  of 
Savings  Banks  Elucidated  by  Mr.  Hicks,  of  the  Bowery  (New 
York)  Savings  Bank — Restriction  of  Deposits  Discussed  by 
Mr.  Charles  A.  Miller,  of  Utica — Dormant  Accounts.       .     211 


CHAPTER  IX 

Ninth  Annual  Convention — Retirement  of  Andrew  D,  Mills 
as  President,  and  Election  of  Charles  A.  Schieren  in  His  Stead 
— Deposits  in  the  Savings  Banks  of  the  State  Reported  the 
Largest  in  Its  History — Adoption  of  a  Resolution  Looking 
toward  Discouragement  of  Individual  Action — Paper  on  *  'Sound 
Money,"byHon.  E.J.  Hill,  of  Connecticut   .         .         .     227 


CHAPTER  X 

Tenth  Anniversary  of  the  Association — Work  of  the  Execu- 
tive Committee — Committee  to  Consider  the  Question  of 
Establishing  Branch  Banks — An  Able  Paper  on  the  Currency 
Question,  by  Hon.  Horace  White — Other  Notable  Addresses — 
Legislative  Hearing  on  the  Mortgage  Tax  Bill         .         -245 


CHAPTER  XI 

Eleventh  Annual  Convention— Amendment  of  the  Constitu- 
tion Concerning  the  Composition  of  the  Executive  Committee — 
"The  Taxation  of  Savings  Banks,"  by  Wm.  H.  S.  Wood,  of  the 
Bowery  Savings  Bank,  New  York — Letter  from  John  Harsen 
Rhoades — Vote  of  Thanks  Tendered  Him  for  His  Untiring  Ef- 
forts as  a  Member  of  the  Association — Addresses  by  Hon. 


xiv  TABLE  OF  CONTENTS 

Stewart  L.  Woodford,  Charles  A.  Conant,  and  Wm.  H.  S.  Wood 
— Letter  from  Charles  A.  Miller,  of  Utica,  Suggesting  Further 
Perfecting  of  the  Organization.     .....     304 


CHAPTER  XII 

Twelfth  Annual  Convention — Vote  of  Thanks  to  the  Chair- 
man of  the  Executive  Committee,  Mr.  Miller — Mr.  Wm.  H.  S. 
Wood,  on  the  Repeal  of  the  Franchise  Tax  Upon  Savings  Banks 
Enacted  in  1901 — Opposition  to  All  Legislation  Authorizing 
the  Interstate  Commerce  Commission  to  Fix  Railroad  Rates — ■ 
Addresses  by  Prof.  Woolsey  M.  Stryker,  of  Hamilton  College, 
and  Col.  William  Carey  Sanger.  .         .         .         -337 


CHAPTER  XIII 

Thirteenth  Annual  Convention — Address  of  President  Wil- 
liam B.  Van  Rensselaer — Report  on  the  Repeal  of  the  Franchise 
Tax — Address  on  New  York  City's  Credit,  by  Mr.  Frank  A. 
VanderKp — Professor  Taussig's  Address  on  "Reform  in  Cur- 
rency."    .........     360 


CHAPTER   XIV 

Fourteenth  Annual  Convention— Sorrow  Over  the  Death  of 
Former  President  John  Harsen  Rhoades — Memorial  of  Re- 
spect to  His  Memory — Paper  on  Bond  Investments  of  Savings 
Banks,  by  Mr.  Mills — Address  on  "Mortgages,"  by  Charles  L. 
Stone,  of  Syracuse — Address  of  Superintendent  Charles  A. 
Keep,  of  the  Banking  Department — ^"Amortization"  Explained 
by  Mr.  Sprague — Bank  Advertising  and  Its  Proper  Uses      384 


CHAPTER  XV 

Fifteenth  Annual  Convention — Retirement  of  President  Van 
Rensselaer  and  Secretary  Conkhn— Address  of  Bank  Superin- 
tendent Clark  Williams — Resolution  of  Mr.  Charles  A.  Miller, 
Relative  to  the  Finances  of  the  City  of  New  York — Election  of 
Mr.  Miller  as  President — Addresses  by  Andrew  Mills,  John 


TABLE  OF  CONTENTS  xv 

Harsen  Rhoades,  Son  of  the  Former  President,  and  Charles  E. 
Hanaman — Amortization  of  Bond  Investments      .         -414 


CHAPTER  XVI 

Sixteenth  Annual  Convention — Address  of  President  Miller 
— Election  of  Mr.  Thomas  F.  Mulry,  of  the  Emigrant  Indus- 
trial Savings  Bank,  New  York,  as  President — Addresses  by 
Edgar  J.  Levey,  John  A.  Johnson,  President  of  the  Savings 
Bank  Section  of  the  American  Bankers'  Association,  Clark  Wil- 
liams, Superintendent  of  the  Banking  Department,  and  Mr. 
E.  P.Maynard 455 

CHAPTER  XVII 

Seventeenth  Annual  Convention — Severe  Illness  of  President 
Mulry  Prevents  His  Attendance — Resolutions  in  Opposition  to 
the  Constitutional  Amendment  Authorizing  Congress  to  Im- 
pose a  Tax  on  Incomes  Adopted — Election  of  Charles  E.  Hana- 
man as  President — Notable  Addresses  by  Hon.  O.  H.  Cheney, 
Superintendent  of  the  Banking  Department,  Mr.  Pierre  Jay, 
and  William  Frederick  Dix.  .....     486 

CHAPTER  XVIII 

Eighteenth  Annual  Convention — Address  of  President 
Charles  E.  Hanaman — Report  of  the  Executive  Committee — 
Proposed  Celebration  of  the  Centennial  of  the  Savings  Bank 
Movement  in  the  United  States — Opposition  to  the  So-called 
Grady  Bill — The  Association  Favors  the  EstabHshment  of  a 
Minimum  Surplus  by  Legislation — Address  of  Superintendent 
Cheney  of  the  Banking  Department      ....     516 

CHAPTER  XJX 

Nineteenth  Annual  Convention — Address  of  President 
Hanaman — Amendments  Made  to  the  Constitution — The 
Group  System  Adopted — Letter  from  Bank  Superintendent 
Van  Tuyl — Remarks  of  Mr.  Coombs  on  Railroad  Bonds — 
Address  by  Hon.  Clark  Williams,  ex-Superintendent  of  Banks, 


xvi  TABLE  OF  CONTENTS 

State  of  New  York — By-laws  Amended — The  Group  System 
Adopted  .         .         .         .         .         .         .         -532 

CHAPTER   XX 

Twentieth  Annual  Convention — Address  of  President  Harold 
P.  Brewster,  of  the  Rochester  Savings  Bank — Report  of  the 
Nominating  Committee  and  Election  of  Officers — Trust  Ac- 
counts Aggregating  More  Than  $3,000 — Valuable  Information 
Pertaining  to  the  Banking  System  of  New  York      .  .     549 

Banking  Law  Revision. 

APPENDIX 


List  of  Savings  Banks  in  the  State  of  New  York,  Arranged  in 
the  Order  of  Their  Incorporation,  Together  with  the  Original 
Incorporators  of  Each  Bank  Specially  Chartered  up  to  the  Pas- 
sage of  the  General  Act  of  1875     .  .  .  .  -565 

B 

List  of  Savings  Banks  in  the  State  of  New  York,  Together 
with  the  Officers  and  Trustees  of  Each,  Arranged  Alphabeti- 
cally          587 


Members  of  the  Savings  Banks  Association  of  the  State  of 
New  York,  Arranged  by  Groups  .         .         .         .614 

D 

Officers  of  the  Savings  Banks  Association  of  the  State  of 
New  York,  1894-1914,  Inclusive  ....     617 

E 

Nominating  Committees,  1894-1914,  Inclusive  .         .     634 


TABLE  OF  CONTENTS  xvii 


Deceased  Members  of  the  Savings  Banks  Association  of  the 
State  of  New  York,  from  April  7, 1894,  to  February  5, 1913  636 

G 

First  Constitution  of  the  Savings  Banks  Association  of  the 
State  of  New  York,  1894  .....     667 

H 

First  Meeting  of  Savings  Bank   Officers  of  New  York 
State      .........     673 


First  Report  of  the  Banks  for  Savings  in  the  City  of  New 
York,  1820        ........     676 


List  of  Superintendents  of  the  Banking  Department  of  the 
Stateof  New  York,  1851-1914    .....     681 

K 

Synopsis  of  Report  of  the  Comptroller  of  the  Currency  as  to 
Savings  Banks  in  the  United  States,  from  1820  to  and  Including 
1913         .........     682 


Biographical  sketches  of  officers  of  the  Savings  Banks  As- 
sociation of  the  State  of  New  York  .         .         .         .     684 

Index  ......  ...     697 


ILLUSTRATIONS 

PIONEERS  IN  THE  FORMATION  OF  THE  SAVINGS  BANKS 

ASSOCIATION FTontispiece 

FACING  PAGE 

JAMES  McMAHON 10 

JOHN  HARSEN  RHOADES,  Sr 26 

ANDREW  MILLS 50 

WILLIAM  G.  CONKLIN 110 

SAMUEL  R.  RAINEY 112 

CHARLES  A.  SCHIEREN 228 

SAMUEL  D.  STYLES 270 

WILLIAM  BAYARD  VAN  RENSSELAER 306 

CHARLES  ADDISON  MILLER 334 

WILLIAM  F.  PATTERSON 352 

THOMAS  M.  MULRY 458 

JONATHAN  B.  CURREY 472 

CHARLES  E.  HANAMAN 496 

FREDERIC  B.  STEVENS 512 

FRANK  MOSLEY  HURLBUT 522 

WILLIAM  H.  ROCKWOOD 534 

HAROLD  P.  BREWSTER 540 

EDWIN  P.  MAYNARD 542 

WILLIAM  FELSINGER 546 


INTRODUCTORY 

IT  HAS  been  remarked,  with  truth,  that  human  in- 
stitutions are  a  form  of  law,  an  embodiment  of  public 
sentiment  concerning  some  condition  or  need  of  the 
social  state,  and  that  as  such  they  grow  rather  than  are 
made.  This  is  preeminently  true  of  the  Savings  Bank  as 
we  know  it  to-day. 

It  is  now  nearly  a  century  since  the  germ  was  trans- 
planted from  Europe  to  these  shores  and  tenderly  watched 
and  nurtured.  The  growth  of  that  little  seed  in  these  one 
hundred  years  has  been  nothing  less  than  marvellous. 
In  our  familiarity  with  the  institution  we  give  little 
thought  to  that  growth,  and  it  is  only  when  the  facts  and 
figures  are  marshaled  before  us  that  we  realize  in  some 
degree  how  deeply  rooted  the  Savings  Bank  System  has 
become  in  our  social  body  and  how  powerful  a  force  it 
is  in  contributing  to  public  order,  temperance,  virtue, 
sobriety,  industry,  thrift,  and  prosperity,  as  well  as  pro- 
motive of  pubUc  credit,  public  faith,  and  financial  stabihty. 

This  is  not  an  exaggeration.  It  is  rather  far  less  than 
the  truth,  for  no  pen,  however  able,  could  adequately  de- 
scribe the  influence  for  good  exerted  by  the  institutions 
for  systematic  saving  now  operated  in  the  United  States, 
or  accurately  calculate  the  sum  total  they  add  to  human 
happiness  and  well-being.^ 

'According  to  the  report  of  the  Comptroller  of  the  Currency  for  the  year 
1913,  the  number  of  Savings  Banks  in  the  whole  country  was  1,978,  the  num- 
ber of  depositors,  10,766,933,  the  aggregate  amount  of  deposits,  $4,727,403,950, 
and  the  average  amount  due  each  depositor,  $439.07.  Of  these  depositors, 
the  Savings  Banks  of  New  York  State  had  3,114,240,  or  nearly  one  third, 


xxii  INTRODUCTORY 

To  labor  assiduously  is  industry;  to  save  systematically 
is  thrift.  These  two  distinct  elements,  bound  together 
by  constant  purpose  and  practice,  insure  the  ultimate 
competence  of  their  principal.  Under  such  direction 
of  purpose  no  one  can  fail  to  secure  his  future  against 
want.  As  for  interest,  it  is  without  doubt  the  most  potent 
factor  in  the  world  of  finance.  But  for  its  unseen  though 
none  the  less  powerful  force,  the  people  of  this  State  who 
are  depositors  in  Savings  Banks  would  have  been  deprived 
of  from  forty  to  sixty  millions  of  dollars  annually,  to  say 
nothing  of  the  value  of  those  millions  for  reinvestment. 
Beyond  this,  the  financial  and  material  growth  of  the 
State  and  nation  is  largely  and  directly  indebted  to  these 
savings  institutions.  Only  those  closely  associated  with 
their  founding  and  development  can  properly  appreciate 
the  amount  of  toil  and  struggle  that  was  necessary  to 
transform  a  crude  idea  into  a  practical  working  system. 
We  of  the  present  day  enjoy  the  fruits  of  the  labors  of  those 
hard-working  pioneers  who  sought  unceasingly  to  place 
their  charges  in  a  position  that  would  command  not  only 
the  admiration  but  the  confidence  of  their  patrons,  the 
depositors.  It  has  been,  moreover,  almost  wholly  a 
labor  of  love,  the  purest  and  most  practical  sort  of  phi- 
lanthropy. 

.  Another  feature  which  is  perhaps  too  Httle  exploited, 
and  at  all  events  not  adequately  understood  by  the  gen- 
eral public,  is  the  system  of  mortgage  loans.  Thousands 
upon  thousands  of  families  throughout  the  land  sit  to- 
day at  their  own  firesides  in  homes  free  and  clear  of  all 
incumbrance  through  the  financial  assistance  of  Savings 

with  cash  deposits  of  $1,700,063,766.36,  truly  a  remarkable  showing  and  a 
further  proof  that  New  York  is  the  Empire  State  in  truth  as  well  as  in  name. 
The    total  number  of  depositors  in  the  world  was  computed  in  1910  at 
110,419,027. 


INTRODUCTORY  xxiii 

Banks  in  their  respective  neighborhoods,  who  otherwise 
would  still  have  been  paying  rent.^ 

As  to  the  underlying  theory  of  the  Savings  Bank,  no 
one  ever  supposed  that  it  would  result  in  changing  human 
nature — that  was  many  centuries  ago  given  up  as  chi- 
merical— but  the  principle  upon  which  these  institutions 
were  founded  was  that  "some,  many,  perhaps  the  major- 
ity of  mankind  would  prefer  independence,  the  result  of 
industry,  to  beggarly  dependence,  the  consequence  of  idle- 
ness; that  they  would  be  frugal  rather  than  wasteful  if  the 
savings  of  frugality  could  be  carefully  garnered  for  the 
time  of  need;  that  they  would  guard  against  vicious  in- 
dulgence rather  than  steep  themselves  in  drink,  if  there 
was  an  incentive  to  accumulation  held  out  as  their  reward 
for  self-denial."^ 

And  so  it  has  proved.  The  experience  of  Europe  has 
been  the  experience  of  America  and,  indeed,  of  every  civi- 
lized country  and  State  the  world  over.  None  is  now 
without  its  institutions  for  the  safekeeping  of  the  accu- 
mulations of  the  thrifty  and  provident.  Their  beneficent 
influence  radiates  everywhere  like  the  blessed  beams  of 
the  sun,  bringing  hope  and  cheer  and  confidence  where 
before  was  naught  but  uncertainty,  dread,  and  squalor. 
No  sooner  was  the  true  character  of  this  institution 
clearly  recognized  than  men  of  influence  and  power  who 
believed  in  the  uplift  of  the  race  and  its  higher  destiny 
rushed  to  its  support,  and  then  it  was  but  a  short  step  to 
having  the  State  throw  around  it  the  aegis  of  its  protection. 
Thus  from  time  to  time,  as  experience  has  shown  the 

'The  report  of  the  Superintendent  of  Banks  for  1913  shows  that  on  the  first 
of  January,  1914,  the  Savings  Banks  of  the  State  of  New  York  held  bonds  and 
mortgages  to  the  amount  of  $989,790,763.46. 

^  History  of  Savings  Banks  in  the  State  of  New  York  from  their  inception  in 
1819  down  to  the  year  1869.  Prepared  by  Emerson  W.  Keyes,  Deputy  Super- 
intendent Banking  Department  (1870). 


xxiv  INTRODUCTORY 

necessity,  laws  have  been  passed,  amended,  or  repealed 
in  order  the  better  to  administer  this  great  sacred  trust. 
While  it  is  not  within  the  scope  of  this  volume  to  enter 
into  a  detailed  history  of  the  inception  of  Savings  Banks 
in  Europe,  where  they  preceded  those  of  the  United  States 
by  only  a  few  years,  it  has  been  thought  that  a  brief 
review  of  the  facts  so  far  as  they  are  known  might  possi- 
bly serve  a  useful  purpose,  and  that  they  will,  at  all  events, 
prove  interesting  to  those  identified  wuth  banking. 

INCEPTION   OF   THE   IDEA  IN   EUROPE 

We  should  be  surprised,  not  to  say  startled,  did  we 
know  by  how  narrow  a  margin  the  great  body  of  active 
workers  of  all  lands — the  hewers  of  wood  and  the  drawers 
of  water — are  removed  from  actual  want  and  destitution. 
True  indeed  it  is  that  one  half  the  world  knows  not  how 
the  other  half  lives.  This  is  the  case  in  all  countries,  though 
perhaps  in  a  less  degree  in  this  land  of  freedom  and  oppor- 
tunity. Partly  from  habits  of  intemperance,  or  extrava- 
gance, which  lead  them  to  live  beyond  their  means,  partly 
because  employment  is  not  always  plentiful  at  all  seasons 
or  always  as  remunerative  as  it  ought  to  be,  there  is 
very  little  left  of  the  weekly  wage,  and  millions  are  in 
imminent  danger  of  being  plunged  into  a  condition  of 
absolute  destitution. 

These  facts  were  observed  by  leading  financiers  and 
philanthropists  of  the  Old  World,  and  much  thought  was 
given  to  means  and  methods  of  ameliorating  the  condition. 
The  possibility  of  insuring  employment  for  labor  at  all 
times  and  under  any  and  all  conditions  was  soon  given 
up  as  impracticable.  So,  too,  mere  charity  or  largess  was 
discarded,  for  every  one  well  knew  that  in  time  it  would 
result    in    destroying    all    manliness    and    self-reliance 


INTRODUCTORY  xxv 

and  raising  up  a  race  of  paupers — shiftless  dependents 
wholly  lacking  in  dignity,  pride,  independence,  and  self- 
respect.  Thus,  before  the  true  idea  of  a  Savings  Bank 
had  dawned  upon  men's  minds,  plans  were  put  in  opera- 
tion whereby  those  who  made  deposits  with  wealthy  and 
responsible  persons  and  left  them  undisturbed  for  a  given 
length  of  time  would  be  given  back  the  money  de- 
posited with  substantial  additions,  sometimes  as  large 
as  one  third.  Such  plans  were,  of  course,  largely  philan- 
thropic and  necessarily  must  have  been  limited  in  scope. 
This  and  other  similar  attempts  constitute  striking  ex- 
amples of  the  course  and  direction  of  public  philan- 
thropy and  its  attempts,  through  legislation  and  otherwise, 
to  overcome  the  evils  of  poverty  before  the  establishment 
of  Savings  Banks.  ^ 

Savings  Banks  have  been  well  defined  as  "associations 
for  the  purpose  of  promoting  thrift  among  the  people  by 
receiving  small  deposits  to  be  invested  at  compound  in- 
terest."   Numerous  persons  have  been  given  the  credit 

^An  act  for  the  relief  and  settlement  of  the  poor  within  this  State  was  con- 
sidered by  the  Legislature  of  New  York  in  1779,  but  not  passed.  At  this 
period  all  the  energies  of  this,  in  common  with  other  States,  were  being  taxed 
to  the  utmost  to  maintain  the  War  for  Independence.  In  the  following  year 
an  act  was  introduced  and  passed  for  a  general  limitation  of  prices.  It  was 
not  to  take  efifect,  however,  until  certain  other  States  should  pass  similar  laws, 
which  they  neglected  to  do,  so  that  the  act  never  became  operative.  It  is 
also  an  interesting  fact  that  the  "Society  for  Tammany,  or  Columbian  Order, 
in  the  City  of  New  York,"  was  originally  incorporated  as  a  charitable  insti- 
tution in  the  year  1805.  The  preamble  to  its  charter  read  as  follows:  "Whereas, 
William  Mooney  and  others,  inhabitants  of  the  City  of  New  York,  have  pre- 
sented a  petition  to  the  Legislature  setting  forth  that  they,  since  the  year  one 
thousand  seven  hundred  and  eighty-nine,  have  associated  themselves  under 
the  name  and  description  of  'The  Society  of  Tammany,  or  Columbian  Order' 
for  the  purpose  of  affording  relief  to  the  indigent  and  distressed  members  of  tite 
said  association,  their  widows  and  orphans,  and  others  who  may  be  found 
proper  objects  of  their  charity,  they  therefore  solicit  that  the  Legislature  will 
be  pleased  to  incorporate  the  said  society  for  the  purposes  aforesaid,  etc.; 
therefore,  be  it  enacted,"  etc.  Other  benevolent  and  "friendly"  societies 
incorporated  about  the  same  time  were:  Orphan  Asylum  of  New  York,  1807; 
St.  Andrew's  Society,  Schenectady,  1808;  Thistle  Society,  New  York,  1808; 
Albany  Humane  Society,  1808;  Mechanics'  Humane  Society,  Troy,  1808; 
Manhattan  Provident  Society,  1809;  Geneva  Friendly  Society,  1810;  Pough- 
keepsie  Humane  Society,   181 2. 


xxvi  INTRODUCTORY 

of  having  first  proposed  the  plan.^  No  practical  result 
was  attained,  however,  until  the  year  1765,  when  a  sort 
of  Savings  Bank  was  established  in  Brunswick,  Germany. 
There  is  evidence  that  a  somewhat  similar  institution 
was  started  in  Hamburg,  as  far  back  as  1778  (which  is 
still  in  existence),  that  took  the  cash  of  domestic  ser- 
vants and  handicraftsmen  and  granted  annuities  to  the 
members  upon  arriving  at  a  certain  age.  These  institu- 
tions differed  radically  from  the  Savings  Banks  of  the 
present  day,  however,  in  the  fact  that  no  withdrawals 
were  permitted.  It  will  thus  be  seen  that  most  if  not  all 
of  these  early  institutions  were  purely  benevolent  in  their 
objects,  and  were  the  direct  outgrowth  of  the  humani- 
tarian spirit  of  those  times.  How  much  we  have  pro- 
gressed since  those  days  in  every  direction  of  private 
and  public  philanthropy  would  make  an  exceedingly  in- 
teresting story. 

The  credit  of  introducing  Savings  Banks  in  Great  Brit- 
ain is  claimed  in  behalf  of  several  different  persons.  In 
1798  a  "Friendly  Society  for  the  benefit  of  women  and 
children  "  was  established  at  Tottenham  High  Cross,  under 
the  superintendence  of  Mrs.  PrisciUa  Wakefield,  whose 
object  was  the  granting  of  annuities  to  members  on  at- 
taining a  certain  age,  or  an  allowance  weekly  in  case  of 
sickness,  and  a  sum  for  burial  at  decease.  Later  a  ''bank 
for  savings"  was  established,  and  in  1804  this  bank  for 
savings  was  regularly  organized  and  trustees  appointed. 

ifiy  no  less  authority  than  the  "Encyclopaedia  Britannica"  (Vol.  21,  p. 
327),  Daniel  Defoe  (1661-1731)  is  credited  with  being  the  first  to  suggest  the 
idea  of  Savings  Banks,  in  1697.  It  seems  certain  that  this  famous  non-con- 
formist and  vitriolic  pamphleteer,  for  whom  neither  the  pillory  nor  the  jail 
seemed  to  possess  terrors,  was  one  of  the  first  to  propose  the  idea,  and  that  the 
fertile  brain  which  conceived  the  immortal  story  of  "Robinson  Crusoe"  was  also 
busy  with  projects  to  relieve  the  distress  of  the  poor  and  unfortunate,  with 
whom  he  sympathized  the  more  keenly  because  he  himself  had  been  more  than 
once  an  inmate  of  a  debtor's  cell. 


INTRODUCTORY  xxvii 

A  prior  claim  is  made  on  behalf  of  the  Rev.  Joseph  Smith, 
of  Wendover,  who  in  1799  circulated  in  his  parish  pro- 
posals to  receive  any  sums  on  deposit  during  the  summer 
and  to  return  the  amount  at  Christmas  with  the  addition 
of  one  third  to  the  whole,  "as  a  bounty  upon  the  deposi- 
tor's economy." 

Jeremy  Bentham  is  also  given  credit  for  inaugurating 
a  scheme  for  the  benefit  of  paupers  in  1797,  which  in- 
cluded a  system  of  "frugality  banks,"  as  he  called  them. 
His  suggestions  do  not  appear  to  have  ever  been  acted 
upon.  It  is  also  stated  that  in  the  year  1806  the  Provi- 
dent Institution  of  London  was  estabUshed,  to  which  a 
Savings  Bank  was  at  first  attached,  but  shortly  after- 
ward discontinued.  In  18 10  the  first  Savmgs  Bank  in 
Scotland  was  formed  by  the  Rev.  Henry  Duncan,  min- 
ister at  Ruthwell,  Dimifrieshire.  Four  years  later,  largely 
through  his  efforts,  the  Edinburgh  Savings  Bank  was  es- 
tabhshed.  Dr.  Duncan  was  a  prodigious  and  unthing 
worker  in  this  field  and  is  regarded  by  many  authorities 
as  the  real  founder  of  Savings  Banks,  in  that  he  organized 
the  first  self-sustaining  institution  and  succeeded  in  so 
arranging  his  scheme  as  to  make  it  applicable  to  the 
country  generally. 

RISE   OF  THE   SAVINGS   BANK    SYSTEM  IN  AMERICA 

In  the  year  19 16  the  United  States  will  be  enabled 
to  celebrate  the  centenary  of  the  establishment  of  Sav- 
ings Banks  in  America.  The  growth  of  that  system 
from  doubtful  experiments  made  in  Great  Britain  early 
in    the   last    century    has    been    remarkable.^    It    was 

iQn  June  8,  9,  and  10,  1910,  there  was  held  in  Edinburgh,  Scotland,  a  very 
successful  celebration  of  the  Centennial  of  Savings  Banks  in  Great  Britain; 
and  to  further  perpetuate  the  event,  a  memorial  of  the  occasion  was  issued 
soon  afterward  in  the  form  of  a  handsome  octavo  volvune,  edited  by  Alexander 


xxviii  INTRODUCTORY 

watched  by  civilized  countries  all  over  the  world.  Though 
by  no  means  so  closely  united  with  the  Mother  Country 
as  at  present,  the  alert  business  men  and  bankers  of  one 
hundred  years  ago  in  the  United  States  kept  in  touch  by 
fast  packet  mails  with  European  developments,  and  when 
the  Scotch  and  English  institutions  became  successful, 
it  was  not  long  before  like  experiments  were  undertaken 
in  this  country. 

The  earliest  banks  in  the  United  States  in  the  order  of 
their  incorporation,  were: 

The  Provident  Institution  for  Savings,  of  Boston, 
legally  estabHshed  by  act  of  incorporation,  December  13, 
1816. 

The  Philadelphia  Savings  Fund  Society,  established 
November  20,  1816,  and  incorporated  February  25,  1819. 

The  Salem  (Mass.)  Savings  Bank,  incorporated  Jan- 
uary 29,  1818. 

The  Savings  Bank  of  Baltimore,  chartered  in  December, 
1818. 

The  Bank  for  Savings  in  the  City  of  New  York,  incor- 
porated March  26,  18 19. 

The  Hartford  (Conn.)  Society  for  Savings,  incorpo- 
rated June  I,  18 19. 

The  Savings  Bank  of  Newport  (R.  I.),  in  June  1819. 

The  Albany  (N.  Y.)  Savings  Bank,  incorporated  March 
24,  1820;  began  business  June  20,  1820. 

As  it  was  many  years  later  before  regular  returns  or 
reports  were  required  from  Savings  Banks,  the  impossi- 
bility of  showing  their  progress  and  growth  from  the  be- 

Cargill,  Esq.,  actuary  of  the  Edinburgh  Savings  Bank,  and  published  by  T. 
&  A.  Constable,  Edinburgh.  Several  men  prominently  identified  with  Sav- 
ings Banks  on  this  side  of  the  water  participated  in  the  celebration  and  were 
given  a  warm  reception.  Among  these  was  Mr.  H.  F.  Gunnison,  Trustee  of 
the  Williamsburgh  Savings  Bank,  Brooklyn,  and  C.  Stuart  Patterson,  of 
Philadelphia. 


INTRODUCTORY  xxix 

ginning  with  anything  like  accuracy  is  evident.^  By  the 
year  1820,  ten  banks  had  been  estabHshed,  and  the  number 
increased  to  61  in  1840,  and  to  278  in  i860. 

There  is  no  doubt  that  the  United  States,  though  not  the 
first  nation  in  the  world  to  establish  Savings  Banks,  is  en- 
titled to  the  honor  of  anticipating  Great  Britain  in  giving 
to  this  great  interest  the  sanction  and  protection  of  the  law.^ 

^The  first  report  of  the  Bank  for  Savings  in  the  City  of  New  York  was 
made  to  the  Legislature  in  1820,  the  year  following  its  incorporation,  and  was 
accompanied  by  an  application  for  an  amendment  of  its  charter  so  as  to  au- 
thorize investments  in  loans  on  real  estate.  The  bank  was  opened  for  deposits 
in  a  room  of  the  New  York  Institution  granted  to  the  trustees  by  the  Academy 
of  Arts,  on  Saturday,  July  3,  1819,  when,  from  eighty  depositors,  the  trustees 
had  the  satisfaction  of  receiving  the  sum  of  $2,807.  For  the  period  of  six 
months  next  ensuing,  1,527  persons  deposited  the  sum  of  $153,376.31.  The 
sum  of  $148,372.27  was  invested  in  public  funds,  according  to  law,  and  $6,606 
was  drawn  out  by  depositors,  of  which  number  forty-six  closed  their  accounts. 
(For  the  full  text  of  this  report,  see  Appendix.) 

In  the  year  1861  Postal  Savings  Banks  originated  in  England  where  they 
eventually  took  the  place  of  Trustee  Savings  Banks  in  large  measure. 

'Appleton's  Universal  Cyclopedia  (Vol.  10,  p.  326),  1908,  is  authority  for 
the  statement  that  the  first  Savings  Bank  in  the  world  to  be  incorporated  was 
the  Provident  Institution  for  Savings,  of  Boston.  "The  Hub"  at  that  time 
(1816)  had  a  population  somewhat  in  excess  of  35,000,  being  in  1810,  35,250,  and 
in  1820,  42,298. 

At  the  celebration  of  the  Centennial  of  Savings  Banks  in  Great  Britain,  held 
in  Edinburgh,  Jime  8-10,  1910,  Mr.  H.  F.  Gunnison,  Trustee  of  the  Williams- 
burgh  Savings  Bank,  of  Brooklyn,  in  a  paper  read  before  the  International 
Society  of  Thrift,  said:  "An  Act  to  incorporate  the  Provident  Institution  for 
Savings  in  the  Town  of  Boston  was  approved  13th  December,  1816.  This  was 
the  first  public  act  of  legislation  in  the  world  which  recognized  the  beneficent 
character  of  Savings  Banks  and  invested  them  with  the  sanction  and  protection 
of  the  law." 

Mr.  Emerson  W.  Keyes,  in  his  History  of  Savings  Banks  in  the  State  of  New 
York  (1870),  saj^:  "It  was  not  until  1817  that  Savings  Banks  in  Great  Britain 
were  recognized  at  all  by  the  government.  Prior  to  this  they  were  merely 
voluntary  associations  of  gentlemen  or  ladies  in  various  localities  who  sought 
in  this  way  to  assist  the  poor  in  their  immediate  neighborhoods.  They  were 
necessarily  limited  in  their  operation,  and  depended  for  their  success-  upon  the 
confidence  reposed  in  the  character  of  their  projectors  and  the  degree  to  which 
that  confidence  was  justified.  It  is  a  pleasure  to  record  that  the  trust  thus  vol- 
untarily assumed  was  rarely,  if  ever,  abused.  But  as  they  extended  the  range 
of  their  operations  and  influence,  the  necessity  for  the  recognition  and  protec- 
tion of  the  law  became  apparent.  This  was  secured  by  an  Act  of  Parliament, 
passed  August,  181 7;  but  owing  to  radical  defects  in  the  plan  or  details  of  or- 
ganization approved  by  Parliament,  they  became  subject  to  greater  frauds  and 
abuses  than  had  characterized  them  under  the  voluntary  system." 


HISTORY  OF 

THE  SAVINGS  BANKS  ASSOCIATION 

OF  THE  STATE  OF  NEW  YORK 


HISTORY  OF  THE  SAVINGS  BANKS 

ASSOCIATION  OF  THE  STATE 

OF  NEW  YORK 


CHAPTER  I 

Reasons  for  the  Formation  of  the  Association— Informal  Meetings 
of  Officers  of  Savings  Banks  to  Exchange  Views  on  Pending 
Legislation  Led  to  Organization  of  Wider  Scope  and  Influence 
—Interesting  Discussion  as  to  Status  and  Powers— The 
Country  Just  Emerging  from  a  Period  of  Severe  Financial 
Stringency— The  Bloodgood  and  Mullin  Bills— Legal  In- 
vestment of  Deposits— Banks  Represented  at  the  Initial 
Meeting. 

FOR  several  years  prior  to  the  organization  of  the 
SAVINGS  BANKS  ASSOCIATION  OF  THE 
STATE  OF  NEW  YORK,  in  the  year  1894,  meet- 
ings of  officers  of  the  various  Savings  Banks  of  the  State 
had  been  held  at  the  rooms  of  the  Chamber  of  Commerce, 
32  Nassau  Street,  in  the  City  of  New  York.  These  meet- 
ings had  for  their  primary  object  the  ascertaining  of  the 
views  of  the  several  Savings  Banks  officers  regarding  legis- 
lation then  pending,  or  about  to  be  introduced,  in  the 
Legislature  of  the  State  affecting  their  institutions,  more 
especially  concerning  investments,  a  subject  that  had  long 
troubled  the  most  sagacious  experts  in  Savings  Bank  man- 
agement. Much  good  resulted,  but  in  order  to  render 
their  efforts  more  effective  it  was  seen  that  they  must  be 
more  concentrated. 
At  the  meeting  held  on  the  26th  day  of  May,  1892, 


4  HISTORY  OF  THE  SAVINGS  BANKS 

a  proposition  was  made  to  organize  in  a  regularly  incor- 
porated association,  with  President,  Treasurer,  and  other 
officers,  and  necessary  committees.  This  plan  was  not 
carried  out  at  the  time  because  the  meeting  referred  to 
was  only  tentative  and  preliminary. 

A   TIME   OF   FINANCIAL   STRINGENCY 

At  the  date  of  the  organization  of  the  Association,  and 
for  some  time  prior  thereto,  there  had  been  a  period  of 
great  financial  stringency.  This  was  the  never-to-be- 
forgotten  year  of  1 893 .  The  Executive  Committee  in  their 
report  called  attention  to  the  fact  that  the  year  had  been 
one  full  of  anxiety  and  burdened  at  times  with  great  per- 
plexities which  had  imposed  responsibilities  from  which 
they  would  gladly  have  escaped  if  possible.  Great  doubt 
and  distrust  existed  throughout  the  United  States  in  busi- 
ness circles,  and  many  felt  that  they  were  on  the  verge 
of  a  financial  crisis  the  severity  or  end  of  which  no  one 
could  foretell.  On  the  15th  of  June  the  strain  had  become 
so  great  that  the  banks  of  discount  in  the  City  of  New  York 
decided  to  issue  clearing-house  certificates  in  order  to 
relieve  the  pressure  upon  them  for  loans,  and  enable  them 
the  better  to  aid  their  customers  and  the  community  at 
large.  Still  the  demand  for  currency  continued  to  in- 
crease rapidly,  both  from  the  banks  throughout  the  coun- 
try having  deposits  in  New  York,  and  also  on  the  part  of 
individuals  who  had  commenced  to  hoard  both  currency  and 
gold,  thus  greatly  adding  to  the  difficulties  of  an  already 
alarming  situation.  To  add  still  further  to  the  perplexi- 
ties of  bankers,  soon  after  July  15th  withdrawals  from  the 
Savings  Banks  began  to  increase  rapidly.  At  least  a 
million  dollars  a  day  was  being  taken  from  the  banks  in 
New  York  and  Brooklyn,  with  a  rapidly  increasing  ten- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK        5 

dency  on  the  part  of  depositors  to  take  alarm  and  create  a 
"run."  As  is  the  case  on  all  such  occasions,  it  was  also 
found  impossible  to  sell  securities  except  at  a  sacrifice,  or 
to  obtain  the  currency  needed  to  pay  depositors. 

Resort  was  had  then  to  the  expedient  of  legal  notice 
of  intention  to  withdraw.  In  New  York  and  Brooklyn 
depositors  gave  notice  of  withdrawals  to  the  extent,  on  the 
average,  of  about  three  per  cent,  of  the  deposits,  of  which 
about  fifty  per  cent,  was  paid.  There  is  ample  proof  to 
justify  the  statement  that  the  Savings  Banks  of  the  State 
of  New  York,  at  that  time,  through  their  prompt  accept- 
ance of  the  issue  then  made  by  the  Executive  Committee, 
did  their  full  share  in  relieving  the  strain  in  financial 
circles,  if  not  in  averting  a  crisis  far  more  disastrous  than 
that  which  actually  took  place.  Thus  was  shown  the 
vital  importance  of  concerted  action  and  the  necessity  of 
organization  to  that  end. 

There  was  also  at  that  time,  as  there  is  to-day,  much 
discussion  on  the  subject  of  legal  investment  of  deposits. 
The  Committee  had  prepared  an  amendment  to  the  then 
existing  law  permitting  the  banks  to  invest  in  the  bonds 
of  seven  cities  located  outside  of  this  State.  The  bill  was 
introduced  in  the  Senate  by  Senator  MuUin. 

EFFORTS   TO   ENLARGE   THE   SCOPE   OF   INVESTMENTS 

At  the  meeting  held  on  the  25th  day  of  May,  1893,  the 
Standing  Committee  that  had  been  appointed  in  the 
year  previous  reported  that  in  pursuance  of  its  duties 
devolving  upon  them,  it  had  organized  for  the  purpose 
of  considering  the  various  matters  affecting  Savings  Banks 
requiring  their  attention.  An  Executive  Committee 
was  appointed  consisting  of  Messrs.  Rhoades,  Sturges, 
McMahon,  Morgan,  Miller,  King,  and  Mills,  and  given 


6  HISTORY  OF  THE  SAVINGS  BANKS 

charge  of  the  active  work  of  the  Committee.  It  was 
decided  to  carefully  revise  the  bill  which  had  been  intro- 
duced for  several  years  in  the  Legislature  extending 
the  scope  of  Savings  Banks  investments  in  the  direction 
of  cities  located  outside  the  limits  of  the  State  of  New 
York,  and  have  the  bill  introduced  in  the  Legislature 
which  was  to  convene  in  the  following  winter.  This  was 
done,  the  biU  being  placed  in  charge  of  Senator  MuUin. 
The  banks  throughout  the  State  were  at  once  notified 
and  copies  of  the  bill  sent  them,  but  by  reason  of  the 
strenuous  opposition  of  officials  of  leading  municipalities 
throughout  the  State,  the  measure  was  smothered  in  the 
Committee. 

The  Committee  of  the  Savings  Banks  then  proceeded 
to  say: 

About  the  same  time  another  bill  was  introduced,  known 
as  the  ''Bloodgood  Bill,"  under  the  provisions  of  which  the 
Savings  Banks  were  to  be  allowed  to  purchase  the  Bonds 
of  the  Cities  of  Boston  and  Worcester  in  Massachusetts, 
New  Haven  in  Connecticut,  Providence  in  Rhode  Island, 
Detroit  in  Michigan,  St.  Louis  in  Missouri,  and  Cleveland 
in  Ohio.  This  Bill  was  not  so  carefully  drawn  as  the  one 
introduced  by  the  banks,  and  the  rehef  afforded  by  its 
provisions  was  very  limited,  and  though  at  the  time  it 
was  not  thought  that  this  particular  bill  would  make  much 
headway  in  the  Legislature,  yet  the  same  opposition 
which  had  developed  in  regard  to  the  bill  introduced  by 
the  banks  and  known  as  the  "Mullin  Bill"  was  shown 
toward  this  bill.  After  repeated  efforts  had  been  made  to 
induce  favorable  action,  the  Senate  Committee  finally 
consented  to  report  both  bills  favorably,  cutting  dowm  the 
provisions  of  the  MuUin  BiU  to  those  covered  by  the 
Bloodgood  Bill.  The  opposition  to  the  passage  of  either 
bill  in  the  Senate  then  became  so  great  and  persistent 
that  your  Committee  deemed  it  wise,  in  view  of  the  oppo- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK         7 

sition  of  the  Officials  of  the  City  of  New  York,  which  was 
open  and  pronounced  in  its  character,  to  ask  the  Mayor 
of  that  city  to  grant  an  interview  to  a  committee  repre- 
senting the  Savings  Banks,  in  order  that  an  opportunity 
might  be  afforded  to  explain  the  position  of  the  banks 
and  the  necessity  for  the  proposed  legislation,  both  in  the 
interests  of  the  depositors  and  the  city  itself.  The  re- 
quest was  made  and  courteously  acceded  to  by  the  Mayor. 
At  this  interview  fourteen  banks,  containing  deposits  of 
over  $350,000,000,  were  represented;  the  facts  of  the 
case  were  plainly  stated;  attention  was  called  to  the  na- 
ture of  Savings  Banks  as  the  depositories  of  the  savings 
of  the  working  classes,  who,  as  depositors,  numbered  al- 
ready over  1,600,000,  with  deposits  of  over  $600,000,000. 
The  large  percentage  of  the  municipal  debt  of  the  State, 
now  held  by  the  banks,  and  the  danger  to  the  credit  of 
these  municipalities  in  the  event  of  a  forced  sale  of  these 
securities,  in  times  of  alarm  or  panic,  was  shown.  The 
need  for  the  enlargement  of  the  scope  of  investment,  in 
view  of  the  rapid  increase  in  the  volume  of  deposits — 
being  over  $40,000,000  in  the  year  1892 — ^was  pointed 
out.  The  great  advantage  to  the  community  and  to  the 
municipalities  themselves  to  be  gained  through  the 
adoption  of  measures  calculated  to  enable  the  banks  to 
continue  their  present  rates  of  dividends  to  depositors, 
and  the  substantial  financial  aid  to  the  municipalities 
in  the  State  rendered  by  the  banks  in  past  years,  and 
which  must  continue  in  the  future,  notwithstanding  the 
scope  for  investment  was  enlarged,  were  dwelt  upon,  while 
the  injustice  done  to  the  depositor  in  forcing  the  invest- 
ment of  his  hard-earned  savings  into  narrow  channels 
and  at  a  very  low  rate  of  interest  returned,  when  other 
channels  for  investment,  equally  secure,  were  obtainable, 
was  referred  to.  The  Mayor  stated  that  this  being  a 
matter  which  affected  all  the  municipalities  in  the  State, 
and  not  that  of  the  City  of  New  York  alone,  he  had  con- 
cluded not  to  take  any  decided  position  either  in  favor  of 
or  in  opposition  to  the  bill;  in  addition  to  which  was  the 


8  HISTORY  OF  THE  SAVINGS  BANKS 

fact  that  though  the  banks  had,  in  previous  years,  been 
of  great  assistance  to  the  city  (for  the  past  few  years 
such  had  not  been  the  case)  and  that  the  credit  of  the 
city  was  so  high,  and  their  means  of  securing  moneys  so 
ample,  that  they  were  practically  independent  of  the 
Savings  Banks;  at  the  same  time  he  had  listened  with 
much  interest  to  what  had  been  said,  and  would  give  the 
subject  his  careful  attention.  The  result  of  the  interview 
was  not,  on  the  whole,  satisfactory,  and  your  Committee 
then  renewed  its  efforts  in  the  Legislature.  Senator 
Bloodgood  pressed  a  vote  upon  his  own  bill,  and  being 
aided  by  Senator  Mullin  in  this  effort,  this  particular  bill 
finally  passed  the  Senate  and  was  sent  to  the  House  for 
action,  and  by  that  body  referred  to  their  Committee 
on  Banks.  Your  Committee  then  decided  that  their 
efforts  had  better  be  directed  toward  the  enlargement  of 
the  Bloodgood  Bill  by  amendments,  rather  than  to  force 
a  vote  upon  their  own  bill  in  the  Senate  itself.  Every 
effort  was  made  in  this  direction.  A  hearing  before  the 
House  Committee  was  asked  for  and  granted.  The  pro- 
posed amendments  were  presented,  but  the  Committee 
declined  to  make  any  changes,  and  after  keeping  the  bill 
in  Committee  until  near  the  closing  days  of  the  session, 
finally  decided  to  report  it  favorably;  and  this  bill,  in  its 
original  form,  was  finally  passed  by  both  branches  of  the 
Legislature.  A  conference  among  the  leading  Savings 
Banks  of  New  York  and  elsewhere  was  then  held  to  de- 
termine whether  we  deemed  it  for  the  best  interests  of 
the  banlcs  to  favor  the  signing  of  the  bill  by  the  Governor, 
and  it  was  decided  that  this  course  had  better  be  adopted. 
The  Governor  was  then  asked  to  give  a  hearing  to  the 
Committee  appointed  to  present  the  facts  before  him, 
which  he  granted,  after  which  he  signed  the  bill,  which 
then  became  a  law.  The  result,  therefore,  has  been  that 
after  six  years  of  prolonged  and  hard  work  the  banks  of 
this  State  have  finally  succeeded  in  obtaining  very  limited 
relief — entirely  inadequate  to  their  needs — and  further 
efforts  must  be  made  either  to  enlarge  the  scope  of  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK         9 

Bioodgood  Bill  or  to  induce  the  Legislature  to  grant  an 
extension  of  the  privilege  of  investment  in  other  direc- 
tions. In  the  opinion  of  your  Committee,  the  necessity 
for  such  action  is  increasing  yearly.  Already  the  Savings 
Banks  of  this  State  are  carrying  over  seventy  per  cent,  of 
its  municipal  indebtedness,  while  the  volume  of  deposits 
is  steadily  increasing,  the  gain  last  year  being  about 
$41,000,000;  and  it  may  be  well  to  state  the  figures  upon 
which  this  statement  is  based : 

Poor's  Hand  Book  of  Investment  Securities  for  the  years 
1892-3  places  the 

County  debt  at $  12,139,000 

City  and  town  debt  at 193,062,000 

Total $205,201,000 

If  this  statement  includes  the  villages,  then  the  banks 
held  about  seventy- four  per  cent. ;  but  if  an  allowance  is 
made  of  $10,000,000  for  the  village  and  school  district 
debt  of  the  State  (and  this  allowance  is  certainly  ample), 
then  the  percentage  of  indebtedness  held  by  the  banks  is 
about  seventy  per  cent. 

The  municipal  securities  held  by  the  Savings  Banks  in 
the  State  on  January  i,  1893,  were  as  follows: 


New  York  City 

Brooklyn 

Other  cities  a  total  of 

Counties 

Towns    .... 

Villages  .      .      . 

School  districts 


$  49,924,589  About  50  per  cent. 
33,867,200  About  75  per  cent. 


36,395,636 
14,968,326 


4,900,320 

9,261,576  Probably  about  75  per  cent. 
6,580,199  Probably  about  90  per  cent 
1,529,971  Probably  about  95  per  cent 


$152,527,497 

It  may  be  interesting  to  add  that  the  banks  hold : 

United  States  bonds $109,375,460 

District  of  Colxunbia  3-65's 5,378,800 

Various  states 44,820,029 


lo  HISTORY  OF  THE  SAVINGS  BANKS 

In  addition  to  the  work  done  by  your  Committee  in 
connection  with  their  efforts  to  secure  legislation  in  the 
direction  already  reported,  they  gave  careful  attention 
to  such  other  bills  affecting  Savings  Banks  as  were,  from 
time  to  time,  introduced  into  the  Legislature. 

One  of  these  bills  provided  for  the  taxation  of  all  de- 
posits in  the  Sa\'ings  Banks  in  excess  of  $500;  another 
for  the  levying  of  a  tax  of  one  half  of  one  per  cent,  upon 
all  loans  on  real  estate  secured  by  mortgage;  and  still  an- 
other requiring  the  banks  to  furnish  the  Department  at 
Albany  with  all  the  details  in  their  possession  connected 
with  dormant  accounts  and  the  immediate  payment  of  all 
such  accounts  into  the  State  Treasury. 

Constant  vigilance  will  be  required  to  prevent  the  pas- 
sage of  laws  which,  in  their  nature,  will  only  impose  still 
greater  burdens  upon  the  debtor  class  throughout  the 
community  and  lead  to  serious  injury  of  the  interests  of 
Savings  Bank  depositors. 

The  report  of  the  Committee  was  adopted  and  ordered 
to  be  printed  and  circulated  among  the  Savings  Banks  of 
the  State. 

The  following  is  a  tabulated  statement  obtained  from 
the  office  of  the  Comptroller  of  the  State,  showing  the 
total  net  debt  of  the  various  municipalities  within  the 
State,  together  w^ith  the  amounts  carried  by  the  Savings 
Banks  as  reported  by  the  Superintendent  of  the  Banking 
Department  in  his  annual  report  for  the  year  1893: 


TOTAL 

AMOUNT  CARRIED 

INDEBTEDN-ESS 

BY  BANKS 

Bonds  of  cities  in  this  State  . 

$170,345,487 

$120,387,970 

"       "counties     "      "       .      .      . 

12,772,305 

14,785,1" 

"       "  towns        "      "       .      .      . 

12,777,167 

9,254,133 

"       "  villages  and  school  district 

bonds  in  this  State        .... 

12,024,032 

8,125,214 

$207,918,991    $152,552,428 


PRESIDENT.    I8g3 
FIRST   VICE-PRESIDENT,   i8Q4-Ic)o6 


JAMES    MCMAHON 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK       ii 
FORMATION  OF   AN  ASSOCIATION  FAVORED 

At  a  meeting  of  the  officers  of  Savings  Banks,  held  on 
June  15,  1894,  Mr.  James  McMahon  presiding,  a  report 
was  received  from  the  Executive  Committee  favoring  the 
formation  of  an  Association,  and  if  considered  desirable, 
the  incorporation  of  the  same.  It  was  agreed  on  all  sides 
that  their  influence  would  be  greatly  increased  and  their 
recormnendations  and  requests  prove  much  more  authori- 
tative if  it  were  well  understood  that  the  organization 
included  every  Savings  Bank  in  the  State;  in  other  words, 
that  the  vast  interests  representing  assets  of  more  than 
six  hundred  and  twenty  millions  of  dollars  would  be  all  the 
better  safeguarded  and  preserved  if  those  in  charge  of 
them  were  banded  together  in  a  regularly  organized  asso- 
ciation for  the  common  good.  A  plan  was  therefore 
recommended,  somewhat  similar  to  that  of  the  American 
Bankers'  Association,  a  successful  organization  of  nation- 
wide influence. 

The  Executive  Committee  which  recommended  this 
action  consisted  of  John  Harsen  Rhoades  (Chairman), 
WilHam  C.  Sturges,  James  McMahon,  A.  C.  Miller,  J. 
Howard  King,  Andrew  Mills;  William  G.  ConkHn,  Secre- 
tary to  the  Cormnittee.  A  proposed  Constitution  was 
submitted  at  this  meeting,  of  which  copies  had  previously 
been  sent  to  every  Savings  Bank  in  the  State,  and  after 
full  discussion  the  same  was  adopted.^  Mr.  John  Harsen 
Rhoades  was  chosen  President;  James  McMahon,  Vice- 
president;  Andrew  Mills,  Treasurer,  and  Wm.  G.  Conklin, 
Secretary. 

In  order  to  show  the  trend  of  thought  on  this  occasion, 


*The  first  Constitution,  together  with  the  one  under  which  the  Association 
is  now  operating,  will  be  found  in  full  in  the  Appendix. 


12  HISTORY  OF  THE  SAVINGS  BANKS 

and  to  prove  that  the  sentiment  was  not  by  any  means 
unanimous  for  the  formation  of  the  Association,  the  follow- 
ing interesting  extracts  are  given  from  the  stenographer's 
report  of  the  discussion  at  that  time: 

DISCUSSION   OVER   ORGANIZATION 

Mr.  Rodgers:  May  I  be  allowed  to  ask  a  question?  Is 
there  some  lawyer  in  this  body  that  can  tell  us  how  we  can 
incorporate,  if  we  wish"  to,  the  Savings  Banks  into  one 
corporation?  Who  represents  the  Savings  Banks,  and  how 
can  we  combine  them? 

Mr.  Hughson:  This  question  is  an  important  one.  I 
do  not  pretend  to  say  anything  as  a  lawyer.  But  it 
strikes  me  that  it  is  impossible  under  the  laws  to  incorpo- 
rate the  Savings  Banks  as  a  corporation,  making  the  banks 
themselves  corporate.  It  seems  to  me  that  the  proper 
thing  to  do  with  this  proposal  is  to  leave  the  whole  subject 
to  a  Committee,  with  power  to  employ  counsel  to  deter- 
miae  that  question  in  the  first  place.  If  the  banks  are 
to  be  incorporated,  then  we  can,  as  delegates  here,  adopt 
a  constitution;  but  the  question  of  taking  this  thing  up 
now  by  articles  and  putting  it  through  seems  to  me  a 
little  premature.  It  could  only  be  adopted  by  the  boards 
of  the  different  banks.  If  we  adopt  it  as  individuals,  I 
do  not  think  there  is  any  law  or  statute  law  under  which  we 
can  incorporate  ourselves,  and  I  do  not  think  any  one  here 
would  be  likely  to  assume  that  risk.  The  proper  course 
is  to  leave  this  whole  subject  to  a  Committee  in  the  first 
place,  with  power  to  employ  counsel  to  determine  what 
sort  of  an  association  this  should  be,  whether  it  can  legally 
be  a  corporation,  which  I  think  clearly  it  cannot,  and  if 
it  cannot,  whether  then  it  would  be  advisable  for  the 
banks  to  form  an  association  in  analog}^  to  many  of  our 
mercantile  brokers'  corporations,  which  are  called  corpo- 
rations improperly,  being  mere  associations  of  individuals. 
If  it  should  take  that  course,  the  officers  would  not  be 
willing  to  bind  themselves  unless  they  are  first  authorized 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK       13 

by  their  several  institutions  to  do  so,  in  which  case  it 
would  have  to  be  left  to  the  Boards  of  Trustees  of  the 
different  Savings  Banks  to  get  their  approbation.  It 
seems  to  me,  therefore,  that  the  proper  course  in  the  first 
place  is  to  refer  this  to  a  Committee,  who  shall  employ- 
counsel  to  determine  what  the  association  shall  be,  its 
nature  and  character,  and  then  have  it  referred  to  the 
separate  banks  for  adoption  after  fixing  the  articles  in 
shape. 

Mr.  Trimble:  Would  it  not  be  advisable,  in  the  first 
place,  as  a  preliminary  question,  there  being  such  a  large 
representation  of  banks  here  to-day,  to  discuss  the  main 
question,  whether  a  corporation  or  an  association  is  desir- 
able any  closer  than  the  present  organization  that  we  have? 
There  may  be  a  difference  of  opinion  about  that,  and  I 
should  like  to  hear  the  views  of  the  gentlemen  present. 

Mr.  Andrews :  In  order  that  we  may  speak  to  the  point, 
I  offer  a  resolution.  We  have  been  called  together  to 
consider  the  suggestion  of  the  Executive  Committee  that 
we  form  an  association  or  corporation.  I  move  that  we 
do  organize  ourselves  into  a  regularly  incorporated  asso- 
ciation, provided  we  can  do  so  after  legal  advice  has  been 
obtained.  This  is  only  in  order  to  bring  the  matter  to  a 
proper  point  for  discussion. 

Mr.  King:  I  second  that  motion. 

The  Chairman :  Gentlemen,  you  have  heard  the  motion. 
Are  you  ready  for  the  question? 

Mr.  Hughson:  Will  you  make  it  definite?  When  you 
say  "we,"  do  you  mean  the  Savings  Banks  of  the  State? 

Mr.  Andrews:  This  call  is  addressed  to  the  officers.  I 
prefer  to  read  it  just  as  it  is  here. 

Mr,  Hughson :  It  makes  an  important  difference  whether 
the  officers  are  to  be  incorporated  or  the  banks. 

Mr.  Harris:  I  move  that  we  lay  the  resolution  on  the 
table.  It  seems  to  me  that  the  Association  has  done  very 
well  in  years  gone  by.  The  officers  have  done  their  duty 
ably  and  effectively,  and  it, seems  to  me  that  we  had  better 
leave  well  enough  alone.     I  am  not  aware  of  any  law  that 


14  HISTORY  OF  THE  SAVINGS  BANKS 

will  authorize  the  incorporation  of  the  Savings  Banks,  or 
the  incorporation  of  individuals  for  the  purpose  of  running 
Savings  Banks,  or  looking  after  the  business  of  Savings 
Banks  or  anything  in  their  interest;  and  it  seems  to  me 
that  we  had  better  leave  this  Association  as  it  is  to-day  to 
do  its  work  in  the  future  as  it  has  done  it  in  the  past.  I 
see  no  objection  to  adopting  some  form  of  constitution 
and  calling  it  a  constitution,  but  it  would  be  merely  the 
adoption  of  a  set  of  rules  to  control  and  to  confine  the 
business  of  the  delegates  from  the  different  Savings  Banks 
when  they  come  together  to  consider  matters  relating  to 
banks. 

The  Chairman:  It  is  moved  and  seconded  that  the 
original  resolution  be  laid  on  the  table. 

Mr.  Rhoades:  I  am  aware  that  a  motion  to  lay  upon 
the  table  is  not  debatable,  but  I  trust  that  I  may  be  allowed 
to  say  a  word  before  the  vote  is  taken.  As  I  said  before, 
as  a  member  of  the  Executive  Committee,  I  would  like  a 
full  and  free  discussion  of  this  whole  subject,  but  I  con- 
fess, candidly,  that  I  hope  the  matter  will  thus  not  be  dis- 
posed of  by  laying  it  on  the  table.  Probably  the  gentlemen 
present,  or  most  of  them,  do  not  realize  the  difficulty  we 
have  to  contend  with  under  our  present  loose  organiza- 
tion. The  burden  of  the  work  has  fallen,  so  far,  upon 
two  or  three  men,  and,  so  far  as  I  am  concerned,  I  am 
free  to  say  the  burden  has  been  more  than  I  can  bear. 
The  difficulty  we  now  have  in  our  loose  organization  is 
that  we  cannot  obtain  the  warm  interest  of  the  different 
banks  in  any  movement  or  in  any  help  when  we  desire  it. 
In  the  second  place,  we  cannot  go  before  the  Legislature 
with  any  great  authority — not  such  as  we  could  if  we  were 
banded  in  some  such  form  as  has  been  suggested,  even 
if  we  are  not  incorporated.  Last  year  some  of  those 
who  are  present  here  will  remember  that  we  had  grave 
doubts  as  to  the  right  of  our  Executive  Committee  to 
take  action,  advising  the  banks  in  the  State  to  suspend 
payment  to  their  depositors,  and  yet  if  such  action  had  not 
been  taken  the  results  might  have  been  extremely  dis- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      15 

astrous.  Now  these  emergencies  do  not  often  occur,  and 
yet  if  we  had  been  incorporated,  or  if  we  had  acted  under  a 
constitution  framed  in  some  such  way  as  is  now  proposed, 
the  Executive  Committee  would  have  felt  that  they  had 
more  authority  than  they  have  at  the  present  time.  I 
spoke  some  weeks  ago  to  Mr.  Preston,  the  Superintendent 
of  the  Banking  Department,  and  told  him  the  Executive 
Committee  were  thinking  of  suggesting  this  plan.  In 
reply,  he  said  that  he  thought  it  was  a  good  one,  and  he 
could  see  no  objection  to  it.  I  do  not  know  whether 
we  can  incorporate  ourselves — I  am  not  a  lawyer — ^but  at 
the  same  time  I  do  not  see  why  we  cannot  incorporate 
an  association  of  this  kind  just  as  the  Banks  of  Deposit 
all  over  the  country,  national  banks,  and  others  incorpo- 
rate themselves,  having  annual  meetings  in  which  all  mat- 
ters relating  to  banks  are  discussed;  in  fact,  they  have 
formed  quite  a  strong  association — so  much  so  that  they 
even  have  their  committees  employed  to  prosecute  fraud. 
Why  a  national  bank  should  have  the  right  to  incorporate 
when  a  Savings  Bank  has  not,  I  cannot  see;  still,  there  may 
be  some  valid  objection  to  such  course.  At  the  same 
time  it  seemed  to  the  members  of  the  Executive  Commit- 
tee that  we  needed  a  closer  organization.  Our  experience 
at  Albany  last  winter  indicated  this.  We  have  been  try- 
ing for  years  to  obtain  legislation,  which  it  seems  impossi- 
ble to  obtain  in  an  honest  way.  We  need  all  the  strength 
we  can  get  by  being  banded  together,  in  order  to  get  any 
relief  whatever.  As  a  gentleman  told  me  recently,  who 
was  deeply  interested  in  the  passage  of  our  bill  in  the 
last  Legislature,  and  had  had  large  experience  at  Albany: 
"Rhoades,  you  wUl  have  all  your  banks  want  to  do  for 
the  next  fifteen  years  in  preventing  vicious  and  bad  legis- 
lation aimed  at  the  Savings  Banks  system,  to  say  nothing 
of  obtaining  necessary  relief  which  I  think  is  really  de- 
manded in  your  case."  All  these  experiences  have  im- 
pressed themselves  very  strongly  upon  the  Executive 
Committee,  and  I  think  most,  if  not  all  of  us,  can  say  that 
we  believe  our  interests  would  be  better  protected  and 


1 6  HISTORY  OF  THE  SAVINGS  BANKS 

better  preserved  if  we  form  a  closer  alliance  than  we  have 
at  present.  I  am  sorry  to  have  taken  up  so  much  time, 
but  this  is  the  position,  as  I  understand  it,  from  the 
standpoint  of  the  Executive  Committee.  I  do  not  press 
for  action,  but  when  the  motion  is  made  to  lay  the 
subject  upon  the  table,  I  would  like  to  have  the  gentle- 
men here  understand  why  the  Executive  Committee  has 
proposed  a  closer  alliance  than  we  now  have. 

Mr.  Hendricks:  I  hope  the  resolution  to  lay  on  the 
table  will  not  prevail.  I  see  no  objection  to  the  original 
motion.  It  is  admitted  by  the  fact  of  this  meeting  that 
something  is  necessary  for  our  general  good  and  welfare. 
The  resolution,  to  my  mind,  is  offered  only  for  information, 
and  I  do  not  see  that  we  will  be  doing  anything  out  of 
the  way  in  getting  the  information  on  this  subject.  I 
trust  the  motion  will  not  prevail. 

Mr.  Sprague:  It  seems  to  me  that  much  better  use 
can  be  made  of  Mr.  Andrews'  motion  than  to  lay  it  on  the 
table.  The  fact  that  we  are  here  shows  that  we  require 
association.  It  seems  to  me  that  Mr.  Andrews'  motion 
can  better  be  amended  so  as  to  eliminate  something  which 
appears  to  be  of  vital  importance,  but  which  I  hardly 
can  think  so — that  of  formally  legally  incorporating  under 
some  statutes  of  the  State  of  New  York.  We  are  not  going 
to  hold  shares;  we  are  not  going  to  sue  nor  be  sued,  we 
hope.  We  are  going  to  act  entirely  by  moral  methods. 
We  are  simply  going  to  associate  ourselves;  and  it  seems 
to  me  that  we  can  do  it  as  well  as  a  college  debating  society 
can  by  adopting  a  voluntary  constitution  and  considering 
ourselves  a  body  of  gentlemen  combined  in  a  certain  way 
and  having  common  ends.  If  the  Clearing  House  of  New 
York  and  other  great  cities  can  get  together  and  be  legally 
incorporated,  it  seems  to  me  that  Savings  Banks  can. 
We  shall  not  be  running  any  risk  if  we  drop  the  idea  of  a 
corporation  or  being  considered  a  sort  of  trust.  We  all 
know  how  bad  a  trust  is,  but  we  shall  be  called  a  trust  in 
a  few  days  from  now  if  we  say  anything  about  incorpo- 
ration.    We  can  do  better  than  that.     We  have  met  to- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      17 

day,  and  there  would  be  no  harm  to  adopt  a  set  of  rules 
merely  for  our  guidance,  but  let  us  do  something  rather 
than  lay  the  subject  on  the  table.  We  might  call  our- 
selves the  Savings  Banks  Officers  of  the  State  of  New  York, 
and  we  could  provide  that  a  Savings  Bank  or  savings  in- 
stitution or  such  officer  as  the  President  may  designate 
shall  form  this.  I  think  that  would  not  be  objectionable 
to  any  charge  of  being  a  corporation;  but  it  seems  to 
me  that  we  ought  to  have  something  that  at  least  has  a 
name. 

I  very  much  doubted  my  legal  power  to  sign  a  check  for 
the  expenses  of  this  body,  whatever  it  is.  It  has  no  ex- 
istence at  all.  We  do  not  even  give  ourselves  the  efficacy 
or  potency  of  a  common  name  by  which  we  call  ourselves. 
I  was  the  secretary  of  a  Committee  appointed  at  a  meet- 
ing held  some  time  in  1892  by  gentlemen  representing  va- 
rious Savings  Banks  of  the  State  of  New  York.  That  was 
the  briefest  way  in  which  I  could  put  it ;  and  coming  before 
the  public  in  that  way  would  not  have  much  effect.  I 
believe  we  can  modify  Mr.  Andrews'  motion  and  to  make 
less  prominent  the  idea  of  legal  incorporation,  and  can  pro- 
ceed to  adopt  a  set  of  rules  that  would  be  good  for  us. 

Mr.  Rodgers :  The  motion  to  lay  on  the  table  not  being 
debatable,  I  would  ask  Mr.  Harris  if  he  will  withdraw  his 
motion. 

Mr.  Harris:  My  object  was  to  extend  the  discussion 
rather  than  cut  it  off.     I  now  withdraw  the  motion. 

Mr.  ICing:  Mr.  Rhoades  has  said  almost  everything 
that  need  be  said  for  the  Executive  Committee,  but  I 
want  to  say  a  word  for  Mr.  Rhoades.  He,  as  we  know, 
coupled  with  yourself,  Mr.  Chairman,  has  been  the 
head  and  front  of  this  Association  during  the  past  year, 
and  almost  since  its  inception.  Mr.  Rhoades  was  absent 
this  winter,  and  nothing  would  have  been  accomplished 
of  importance  had  it  not  been  that  you  were  willing  to 
take  his  place.  While  we  want  to  lean  on  the  Chairman 
of  our  Executive  Committee  and  to  continue  to  lean  on 
him,  I  wish  to  say  that  I  think  it  is  a  wrong  thing  that  we 


i8  HISTORY  OF  THE  SAVINGS  BANKS 

should  be  so  organized  that  we  have  not  some  proper 
system  of  doing  our  business  when  he  is  out  of  town. 
From  what  I  have  seen  and  from  what  Senator  Hendricks 
has  told  me,  that  there  can  be  no  proper,  legal  incorpo- 
ration, I  still  believe  if  we  had  an  association  we  would 
have  support;  therefore,  let  us  have  an  association.  Let 
that  association  have  the  weight  that  consolidated  effort 
gives.  When  we  go  before  the  Governor  at  Albany  and 
ask  him  to  veto  a  measure,  let  it  not  be  Mr.  McMahon,  of 
New  York,  President  of  the  Emigrant  Industrial  Savings 
Bank,  who  appears  to  speak  a  word  in  favor  of  or  against 
such  legislation,  but  let  it  be  in  the  name  of  this  Asso- 
ciation, which  should  embrace  every  Savings  Bank  in  the 
State,  and  then  it  will  carry  with  it  a  force  tenfold  that 
which  could  be  conveyed  by  him  speaking  as  an  individ- 
ual. I  am,  therefore,  in  favor  of  having  such  an  organi- 
zation, such  a  Secretary,  such  a  system  of  annual  dues, 
small  though  they  may  be,  that  will  aggregate  a  sum  that 
when  a  bill  comes  before  the  Legislature,  such  a  bill,  for 
instance,  as  that  introduced  by  Mr.  Mittnacht,  the  knowl- 
edge that  such  a  bill  has  been  introduced  is  at  once  known 
to  the  Executive  Committee,  the  Executive  Committee 
to  at  once  communicate  with  its  Secretary,  who  may  be  a 
paid  officer,  and  he  at  once  send  a  copy  of  such  bill  to 
every  Savings  Bank  in  the  State,  and  then  let  the  Presi- 
dent of  that  bank,  or  the  Treasurer,  or  whoever  is  man- 
aging it,  say  to  his  trustees:  "We  want  you  to  see  or  com- 
municate with  our  member  in  the  Legislature;  we  want 
you  to  interest  him,  and  we  want  him  to  interest  himself 
to  defeat  such  bill  or  to  favor  it."  These  are  the  only 
tools  we  can  employ — they  are  the  only  tools  we  wish  to 
employ.  It  is  the  only  thing  we  are  justified  in  doing, 
and  if  we  have  a  proper  organization  we  will  then  have 
the  burden  fall  more  equally  than  it  now  does.  You  can 
go  to  Mr.  Rhoades,  as  Chairman  of  your  Executive  Com- 
mittee, but  there  is  no  more  reason  why  you  should  go  to 
him  than  to  any  other  man  in  this  room.  I  should  like 
to  make  one  more  suggestion.     We  meet  here,  and  it  is 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      19 

perhaps  as  wise  to  meet  here  once  a  year  as  anywhere, 
but  it  would  be  infinitely  wise,  if  not  wiser,  to  meet  in 
Albany  once  in  the  winter.  The  doctors,  the  dentists, 
the  lawyers,  in  fact  many  of  the  societies  of  the  State 
meet  there.  Why  not  the  Savings  Banks?  Then  we 
would  be  able  to  bring  right  before  the  members  of  the 
Legislature  the  very  arguments  we  want  to  bring,  and 
we  would  have  them  effective.  I  trust,  Mr.  Chairman, 
that  there  will  be  such  an  association,  such  an  organiza- 
tion, and  such  sums  of  money  paid  as  will  enable  us  to 
have  a  properly  paid  officer,  with  some  counsel  or  per- 
son to  represent  us  in  Albany,  so  that  the  very  instant 
there  is  a  wrong  about  to  be  perpetrated,  or  a  right  that 
we  want  enforced,  whether  it  be  in  Washington  or  in 
Albany,  we  will  be  able  to  bring  the  whole  power  of  the 
Savings  Banks  of  the  State  to  bear  upon  our  represen- 
tatives wherever  they  are. 

Mr.  Harris:  The  question  is  not  at  all  on  the  desirability 
of  incorporation  of  the  Savings  Banks,  but  in  the  manner 
in  which  it  can  be  legally  carried  out.  If  it  is  impossible 
to  incorporate  them,  the  next  thing  is,  can  they  associate 
together,  and  the  next  question  is,  who  forms  the  associ- 
ation? Do  the  Savings  Banks  form  it,  or  do  its  officers 
that  meet  here  form  it?  If  the  Savings  Banks  form  it, 
they  will,  of  course,  have  to  incur  the  expenses.  If  the 
officers  who  meet  here  form  it,  we  will  have  to  incur  the 
expenses.  The  question  is  whether  the  officers  here  form 
an  association — form  it  among  themselves — and  are  will- 
ing to  incur  the  expenses,  whether  their  banks  will  sustain 
them  or  not.  That  is  the  reason  I  proposed  in  the  first 
place  to  refer  the  whole  matter  to  a  Committee  to  employ 
counsel,  not  to  oppose,  but  to  carry  it  out,  and  to  provide 
the  proper  legal  method  of  carrying  it  out.  The  desirabil- 
ity is  proved  by  what  has  been  effected  already  by  this 
Committee;  and  everybody  must  admire  the  skill  and 
the  energy  wdth  which  they  have  advanced  the  interest 
of  the  Savings  Banks.  In  anything  I  have  said  I  am  not 
opposed  at  all  to  what  has  been  said  as  to  the  desirability 


20  HISTORY  OF  THE  SAVINGS  BANKS 

of  this  Association.  It  is  only  as  to  the  method  by  which 
it  is  to  be  carried  out. 

The  Chairman:  As  I  understand  the  motion,  it  is  that 
we  proceed  and  adopt  the  constitution,  which  was  duly 
seconded. 

Mr.  Andrews:  The  intention  was  to  bring  forth  an 
expression  of  opinion  from,  those  present  as  to  whether  it 
is  the  sense  of  this  meeting  that  we  shall  proceed  and  form 
this  association.  Whether  it  be  an  organization,  a  cor- 
poration, or  association,  I  do  not  care.  But  we  do  want 
to  arrive  at  some  consensus  of  opinion  whether  we  shall 
go  forward  or  drop  it.  That  is  what  the  resolution  was 
intended  to  bring  forth.  I  think  the  resolution  ofifered 
before  mine  could  be  very  well  added,  and  the  whole 
matter  be  referred  to  a  Committee  to  report  definitely 
what  we  can  do.  Candidly,  when  I  heard  the  names  read 
of  the  gentlemen  who  signed  that  report,  I  took  it  for 
granted  that  they  had  investigated  the  whole  subject, 
and  could  say  definitely  that  we  could  form  or  incorporate 
an  association;  but  they  do  not  seem  to  have  investi- 
gated it. 

Mr.  Rhoades:  In  this  connection  I  do  not  think  the 
Executive  Cormnittee  has  any  doubt  whatever  as  to  the 
right  of  the  ofl&cers  representing  the  Savings  Banks  at  this 
annual  meeting  to  adopt  a  constitution  drawn  upon  the 
lines  of  the  one  proposed,  with  possibly  some  shght  modi- 
fications. I  did  suppose  that,  so  far  as  an  act  of  incor- 
poration was  concerned,  there  might  be  some  legal  diffi- 
culties in  the  way,  but  we  must  bear  in  mind  that  we 
are  now  only  perfecting  an  association.  For  the  past  two 
years  we  have  agreed  to  have  an  annual  meeting;  we  have 
appointed  an  Executive  and  a  Standing  Committee,  and 
it  has  been  agreed  by  those  present  at  each  annual  meeting 
that  the  members  of  the  Association  shall  pay  $5  as  annual 
dues;  and  what  we  now  propose  to  do  is  simply  to  bring 
this  Association  into  a  better  working  condition,  by  having 
a  constitution  and  well-regulated  rules  for  our  guid- 
ance.    I  admit,  frankly,  that  if  we  decide  to  adopt  a  con- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      21 

stitution  at  this  meeting,  the  only  proper  course  for  the 
officers  of  the  Savings  Banks  to  foUow  will  be  to  furnish  a 
copy  of  such  constitution  to  their  Board  of  Trustees,  state 
to  them  the  advantages  of  the  banks  being  associated  in 
the  manner  proposed,  and  urge  their  consent  to  allowing 
the  officers,  in  their  name,  to  join  the  Association,  to  work 
with  it,  and  pay  such  annual  dues  as  are  imposed  by  the 
rules  of  the  Association.  If  the  matter  is  properly  pre- 
sented and  the  Board  of  Trustees  thoroughly  understand 
what  has  been  done  and  what  it  is  intended  to  do,  I  have 
not  the  slightest  doubt  that  they  will  wilhngly  consent  to 
join  with  all  others  in  completing  such  an  Association  as 
wiU,  in  my  judgment,  be  of  the  greatest  service  to  the 
Savings  Banks  interests  of  this  State. 

I  do  not  think  there  is  any  legal  trouble  in  the  way. 
The  reference  to  a  Committee  would  simply  result  in  the 
whole  subject  being  carried  over  for  another  year,  for  the 
reason  that  we  have  but  one  regular  meeting  and  many  of 
the  members  come  from  a  distance,  and  therefore  it  would 
be  difficult  to  obtain  a  fuU  representation  at  a  special 
meeting.  I  hope,  therefore,  that  the  proposed  plan  will 
be  discussed,  modffied,  and  fuiaUy  adopted  at  this  meeting, 
and  the  Secretary  instructed,  before  we  adjourn,  to  send 
copies  to  every  Savings  Bank  in  the  State  coupled  with 
an  invitation  to  become  a  member  of  this  Association, 
suggesting  that  such  action  be  ratified  by  their  Boards 
of  Trustees ;  and  this  would  set  the  whole  scheme  in  motion. 

Mr.  Rainey:  Mr.  Chairman,  I  offer  an  amendment  to 
Mr.  Andrews'  motion,  that  the  officers  of  the  Savings 
Banks  of  the  State  of  New  York  organize  a  regular  Asso- 
ciation and  adopt  a  constitution,  and  that  we  do  nothing 
about  incorporation  at  this  time. 

Mr.  Hendricks :     I  second  that  amendment. 

Mr.  Trimble:  I  should  like  to  ask  if  this  Association 
would  have  any  more  power  or  influence  than  the  Asso- 
ciation as  it  is  now.  On  the  main  question,  whether  in- 
corporation is  desirable,  I  differ  in  opinion  with  my  friends 
and  associates  with  great  reluctance.     It  seems  to  me  that 


22  HISTORY  OF  THE  SAVINGS  BANKS 

incorporation  is  open  to  objection  on  two  grounds,  as  tend- 
ing to  constrain  and  limit  the  freedom  of  action  of  the 
individual  banks.  I  am  pretty  old-fashioned  myself,  and 
represent  a  very  old-fashioned  corporation,  and  I  think 
they  would  be  very  shy  of  coming  into  an  association  by 
which  they  would  be  constrained  in  any  way  to  do  what 
they  did  not  think  proper  to  do.  I  feel  the  constraint  in 
believing  it  my  duty  to  say  what  1  am  saying  now  and  to 
differ  with  my  friends.  It  has  a  great  deal  of  influence, 
and  some  gentlemen  may  not  feel  willing  to  put  themselves 
within  it.  Second,  as  likely  to  increase  and  intensify  the 
opposition  to  Savings  Banks  on  the  part  of  politicians  and 
municipal  ofi&cers  who  seek  in  one  way  or  another  to  use 
depositors'  funds.  In  various  ways  there  is  almost 
an  organized  hostility  to  Savings  Banks  in  this  State. 
Now,  however  unjust  it  may  be,  there  would  be  an  outcry 
from  these  sources  against  a  Savings  Bank  trust  with 
$600,000,000  to  dictate  and  control  legislation  with;  that 
would  be  a  cry  which  we  would  have  to  meet,  undoubtedly. 
I  think  it  would  be  of  considerable  disadvantage  to  the 
interests  of  the  Savings  Banks  to  open  the  door  to  any  such 
criticism.  My  own  feeling  in  regard  to  Savings  Banks  is 
that  they  should  do  their  business,  a  proper  business,  as 
quietly  and  as  unobtrusively  as  possible,  not  to  be  in 
evidence  much  of  the  time.  But  it  is  very  proper  that 
we  should  have  some  means  of  acting  in  concert  when  the 
necessity  arises,  and  I  supposed  the  present  organization 
had  been  found  sufficient  for  that  end.  But  to  form  an 
organization  or  a  corporation,  which  in  one  way  or  another 
would  expose  us  to  criticism  just  or  unjust,  and  to  con- 
strain the  action  of  the  banks,  I  feel  strongly  opposed  to, 
and  opposed  to  becoming  committed  to  any  decided  posi- 
tion and  advocacy  of  any  particular  plan.  It  seems  to  me 
that  we  are  doing  pretty  well  as  we  are. 

Mr.  Rainey :  The  amendment  I  made  was  not  to  incor- 
porate, and  I  do  not  suppose  it  is  possible  for  this  associa- 
tion, if  it  was  incorporated,  to  bind  the  trustees  to  any 
course  of  action. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      23 

Mr.  Foster:  I  rise  with  some  reluctance,  I  represent 
a  bank  in  the  easternmost  county  of  this  State.  We  feel 
modest  about  coming  before  you,  but  we  do  most  earnestly 
want  to  see  this  thing  passed  and  have  an  Association. 
We  have  felt  a  very  great  relief  when  we  found  that  we  had 
an  Executive  Committee  that  were  looking  out  for  those 
matters  that  were  being  presented  to  the  Legislature. 
There  are  so  many  bills  that  are  presented  simply  as  a 
strike  at  the  Savings  Bank,  While  we  have  an  Executive 
Committee  to  watch  these  bills,  we  are  ready  when  they 
call  upon  us  to  do  what  we  can.  We  feel  that  we  cannot  do 
much.  As  we  are  in  the  country,  we  are  differently  situ- 
ated from  many  of  the  larger  Savings  Banks  in  the  State. 
These  bills  that  are  coming  up,  such  as  the  submitting  of 
our  books  to  the  inspection  of  the  assessors,  would  hurt 
us  seriously.  Our  people  are  careful,  and  are  very  timid 
about  putting  their  deposits  where  assessors  can  see  them ; 
and  every  year  some  bill  of  some  kind  has  come  before 
the  Legislature  that  we  should  be  sorry  to  see  become  a 
law.  We  want  to  do  what  we  can  to  prevent  it.  What 
good  will  it  do  for  one  of  us  to  go  to  them?  But  if  we 
combine  with  all  the  other  banks,  and  have  an  association 
of  this  kind,  while  they  are  protecting  themselves  they 
are  protecting  us.  The  Executive  Committee  have  given 
much  time,  thought,  and  study  to  this  matter,  and  have 
done  their  part  well.  We  feel  that  we  have  been  protected. 
They  suggest  this,  and  we  heartily  say  amen,  and  hope 
this  will  be  passed. 

A  Member:    What  is  the  motion  before  the  house? 

The  Chairman :  The  amendment  to  the  original  motion 
is  that  we  proceed  to  adopt  a  constitution  for  an  associa- 
tion to  be  christened  hereafter. 

A  Member:  It  seems  that  all  we  want  to  do  is  to  name 
this  child.     It  is  growing  and  doing  good  work. 

Mr.  Rhoades :  I  wish  to  say  a  word  in  answer  to  what 
Mr.  Trimble  has  said  who  represents  one  of  the  largest 
Savings  Banks  in  the  State,  a  personal  friend,  and  a  man 
whose  judgment  I  respect  very  highly.     I  do  not  know  that 


24  HISTORY  OF  THE  SAVINGS  BANKS 

I  can  make  a  better  answer  than  to  put  it  in  the  shape 
of  a  question  and  ask  him  what,  in  his  judgment,  would 
have  been  the  results  last  year  during  the  panic  had  it  not 
been  for  the  existence  of  this  loose  association,  which  was 
created  two  years  ago?  When  the  meeting  was  called 
by  the  Executive  Committee  to  consider  the  gravity  of 
the  situation  as  relating  to  Savings  Banks,  and  the  officers 
of  the  banks  near  at  hand  were  requested  to  be  present  at 
such  meeting,  there  was  not  a  man  on  the  Executive  Com- 
mittee who  had  the  least  idea  that  any  action  such  as  was 
taken  was  needed  or  would  be  taken  at  that  meeting. 
Under  such  a  condition  as  to  the  mind  of  the  individual, 
the  result  would  have  been,  if  we  had  not  had  an  organi- 
zation through  which  we  were  able  to  come  together,  dis- 
cuss the  situation,  and  to  take  authoritative  action,  that 
the  conditions  of  affairs  then  existing  would  probably 
have  continued  for  a  week  longer.  If  it  had  gone  on  for  a 
week  longer — ^yes,  for  three  days  longer — in  my  honest 
judgment  we  would  have  had  a  wild  panic  among  our  ovm 
depositors  and  in  the  Savings  Banks  throughout  the  State 
of  New  York  and  through  Eastern  States,  which  fact  would 
have  produced  an  aggravated  condition  of  affairs  in  bank- 
ing and  commercial  circles  sufficient  to  have  caused  much 
greater  disaster  than  actually  occurred.  The  run  was 
stopped  and  relief  came.  Why?  Because  we  had  an  or- 
ganization— a  loose  organization  to  be  sure,  but  sufficient 
for  the  purpose — and  an  Executive  Committee,  who,  with 
their  associates,  saw  the  necessity  of  the  occasion  and  acted 
upon  it.  If  this  is  not  the  best  object-lesson  we  could  have, 
as  showing  the  necessity  of  a  strong  organization,  then  I 
do  not  know  of  another  one.  Again,  take  the  instance  of 
the  Wilcox  Bill,  which  recently  passed  the  Legislature, 
and  by  the  terms  of  which  the  banks  were  required  to  pub- 
lish all  deposits  on  which  there  had  been  no  transaction  for 
the  preceding  five  years.  If  there  had  not  been  this  As- 
sociation, loose  in  its  organization  as  it  now  is,  that  bill 
probably  would  have  been  signed  by  the  Governor  and  be 
a  law  to-day.     I  do  not  fear,  as  Mr.  Trimble  fears,  that  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      25 

fact  of  an  organization  tends  to  weaken  and  to  excite 
hostility  toward  the  banks.  On  the  other  hand,  I  feel 
that  it  wdll  strengthen  us.  We  must  hold  together  in  order 
to  resist  bad  legislation.  We  must  hold  together  if  we 
are  to  obtain  relief  in  any  direction  from  the  Legislature 
of  this  State,  and  I  teU  you  when  we  do  hold  together  and 
do  act  together  we  are  a  power.  Individually,  we  are  not. 
That  is  why  I  urge  so  strongly  the  formation  of  a  perma- 
nent association,  which  would  hold  and  bind  us  together. 
Personally,  we  have  no  interests  to  serve  in  the  matter. 
There  is  no  interest  to  serve  but  the  interest  of  our  depos- 
itors. Our  interests  are  all  alike  and  all  akin.  There  is 
not  a  small  bank  in  this  State,  when  it  comes  to  legislation, 
which  has  not  more  influence  with  the  Legislature  than 
the  individual  banks  in  New  York  City.  We  need  their 
help  as  well  as  they  need  ours,  and  we  need  to  work  to- 
gether with  them  as  one  man.  Let  the  public  know  this, 
and  let  them  know  that  we  are  bound  together  not  to  pro- 
tect our  own  individual  interests  but  the  interests  of  one 
million  and  a  half  of  depositors,  with  $620,000,000  of  their 
savings  in  our  care,  and  you  may  rest  assured  that  they  will 
sustain  us  in  our  efforts  to  do  what  is  right.  Upon  this 
ground  I  am  wilUng  to  stand  before  the  public  and  fight  it 
out  on  this  line  all  my  life. 

Mr.  Trimble:  I  would  like  to  ask  another  question  in 
reply,  as  to  whether  the  action  of  the  Executive  Committee 
of  the  present  Association  is  not  thoroughly  effective? 

Mr.  King :  I  think  there  is  some  little  misapprehension, 
although  Mr.  Trimble  has  not  said  a  single  word  to  me.  I 
do  not  feel,  and  I  suppose  that  is  the  feeling  of  almost  ever}^ 
man  here  who  is  a  Treasurer  or  President  of  a  Savings 
Bank,  that  he  is  by  his  action  here,  or  by  forming  an  as- 
sociation, going  to  bind  his  Board  of  Trustees  to  certain 
poHcies  of  investment  or  otherwise.  It  is  not  the  idea 
that  this  Association  is  to  be  formed  in  that  way,  and  I  can 
understand,  in  some  measure,  the  feelings  of  Mr.  Trimble 
when  he  says  it  is  doubtful  whether  he  would  like  to  com- 
mit his  Board  of  Trustees,  and  whether  his  Board  of 


26  HISTORY  OF  THE  SAVINGS  BANKS 

Trustees  would  sufifer  themselves  to  be  committed.  This 
is  not  the  idea.  We  are  to  be  left  just  as  free  in  all  of  these 
matters,  and  in  all  matters  of  investment,  as  we  are  to-day. 
We  join  hands  simply  for  advice,  cooperation,  consulta- 
tion, and  for  the  protection  of  our  depositors,  and  that  is 
all  there  is  in  it.  This,  I  tliink,  is  one  of  the  great  points, 
this  standing  together,  as  Mr.  Rhoades  insinuates,  fighting 
it  out,  as  General  Grant  said,  if  it  takes  all  summer  and 
next  winter,  too. 

Chairman :  If  your  Chairman  might  be  allowed  to  sug- 
gest a  name  for  the  child,  why  not  let  it  remain  as  it  is,  the 
Savings  Bank  Association? 

Mr.  Rainey :  Why  not,  if  you  decide  to  organize,  name 
it  as  suggested  in  your  proposed  constitution? 

The  Chairman:  Then,  as  I  understand,  the  question 
before  the  meeting  is,  shall  we  form  an  association  for  mu- 
tual protection? 

Mr.  Harris :  By  whom  is  that  association  to  be  formed? 
I  would  like  to  have  it  in  proper  form. 

Mr.  Rainey:  My  motion  is  this:  that  the  oflScers  of  the 
Savings  Banks  of  the  State  of  New  York  here  represented 
organize  a  regular  association  and  adopt  a  constitution. 

Calls  for  the  question. 

Chairman :  You  have  heard  the  motion,  which  has  been 
duly  seconded.  Are  you  ready  for  the  question?  AH  in 
favor  please  signify  by  saying  aye — contrary-minded,  no. 

Unanimously  carried. 

Chairman :    What  is  your  further  pleasure? 

At  this  point  in  the  proceedings  the  proposed  constitu- 
tion was  presented  by  the  Chairman  of  the  Executive  Com- 
mittee, taken  up  section  by  section,  carefully  analyzed, 
discussed,  amended,  and  finally  adopted  unanimously. 

THE   FIRST  LIST   OF   OFFICERS 

At  this  fij-st  Convention,  the  Nominating  Committee, 
Messrs.  King,  Rainey,  and  Andrews,  reported  in  favor  of 


PRESIDENT,   i8q4-iS 


JOHN   HARSEN   EHOADES,    SR. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK     27 

the  election  of  the  followmg  officers,  who  were  unani- 
mously chosen: 

President:  John  Harsen  Rhoades,  President,  Green- 
wich Savings  Bank,  New  York. 

Vice-President:  James  McMahon,  President,  Emigrant 
Industrial  Savings  Bank  (also  recommended  for  Chairman 
of  the  Executive  Committee). 

Secretary:  Wilham  G.  Conklin,  Secretary,  Franklin  Sav- 
ings Bank,  New  York. 

Treasurer:  Andrew  Mills,  Trustee,  Dry  Dock  Savings 
Bank,  New  York. 

Executive  Committee:  William  C.  Sturges  (Chairman), 
President,  Seamen's  Savings  Bank,  New  York;  A.  C. 
Miller,  Treasurer,  Utica  Savings  Bank;  Samuel  R.  Rainey, 
Secretary  and  Treasurer,  Hudson  City  Savings  Institution; 
J.  Howard  King,  President,  Albany  Savings  Bank;  Ed. 
S.  Dawson,  President,  Onondaga  Savings  Bank,  Syracuse. 

Members  ex-qfficio:  John  Harsen  Rhoades,  James 
McMahon,  Andrew  Mills,  William  G.  Conklin. 

BANKS  REPRESENTED   AT  THE   INITIAL  MEETING 

A  list  of  banks  represented  at  the  initial  meeting  is 
given  herewith: 

Albany  Savings  Bank,  Albany,  J.  Howard  King,  President. 

Auburn  Savings  Bank,  Auburn,  E.  H.  Townsend, 
Treasurer. 

Binghamton  Savings  Bank,  Binghamton,  Harris  G. 
Rodgers,  Treasurer. 

Cayuga  Co.  Savings  Bank,  Auburn,  W.  H.  Meaker, 
Treasurer. 

Cohoes  Savings  Bank,  Cohoes,  W.  T.  Dodge,  President. 

Hudson  City  Savings  Institution,  Hudson,  Samuel  R. 
Rainey,  Secretary. 

Onondaga  County  Savings  Bank,  Syracuse,  E.  S.  Daw- 
son, President;  Wm.  D.  Dunning,  Trustee. 


28  HISTORY  OF  THE  SAVINGS  BANKS 

Oswego  County  Savings  Bank,  Oswego,  Joseph  B. 
Lathrop,  Treasurer. 

Poughkeepsie  Savings  Bank,  Poughkeepsie,  Edward  S. 
Atwater,  Trustee. 

Rochester  Savings  Bank,  Rochester,  Edward  Harris, 
Trustee. 

Portchester  Savings  Bank,  Portchester,  John  W.  Diehl, 
Assistant  Cashier. 

Riverhead  Savings  Bank,  Riverhead,  Nat.  W.  Foster, 
President. 

Rondout  Savings  Bank,  Rondout,  J.  E.  Derrenbacher, 
Secretary. 

Syracuse  Savings  Bank,  Syracuse,  Francis  Hendricks, 
Trustee. 

Southold  Savings  Bank,  Southold,  H.  H.  Hunting, 
Secretary,  J.  G.  Case,  Vice-President. 

Troy  Savings  Bank,  Troy,  Chas.  E.  Hanaman,  Presi- 
dent. 

Yonkers  Savings  Bank,  Yonkers,  S.  Emmet  Getty, 
Secretary. 

Brooklyn 

City  Savings  Bank  of  Brookl}Ti,  Theophilus  Olena, 
Vice-President. 

Dime  Savings  Bank  of  WOHamsburg,  Henry  Geckler, 
Assistant  Secretary. 

Dime  Savings  Bank  of  Brooklyn,  B.  H.  Huntington, 
President. 

East  Brooklyn  Savings  Bank,  Eugene  F.  Barnes, 
Treasurer. 

East  New  York  Savings  Bank,  Frank  C.  Lang,  Secre- 
tary. 

German  Savings  Bank,  George  H.  Fisher,  Trustee. 

Wniiamsburgh  Savings  Bank,  J.  V.  Meserole,  President. 

New  York  City 

Bank  for  Savings,  Merritt  Trimble,  President. 
Dry  Dock  Savings  Bank,  Andrew  Mills,  Trustee. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      29 

Emigrant  Industrial  Savings  Bank,  James  McMahon, 
President. 

Franklin  Savings  Bank,  William  G.  Conklin,  Secretary. 

German  Savings  Bank,  Philip  Bissinger,  President. 

Greenwich  Savings  Bank,  John  Harsen  Rhoades,  Presi- 
dent. 

Harlem  Savings  Bank,  Charles  B.  Tooker,  President. 

Institution  for  the  Savings  of  Merchants'  Clerks,  Chas. 
C.  Brinckerhoff,  Secretary. 

Irving  Savings  Institution,  David  M.  Demarest,  Presi- 
dent. 

New  York  Savings  Bank,  Frederick  Hughson,  President. 

North  River  Savings  Bank,  Samuel  D.  Styles,  President. 

Seamen's  Bank  for  Savings,  William  C.  Sturges,  Presi- 
dent. 

Twelfth  Ward  Savings  Bank,  Isaac  Hopper,  President. 

Union  Dime  Savings  Institution,  Chas.  E.  Sprague, 
President. 

United  States  Savings  Bank,  Constant  A.  Andrews, 
President. 

In  this  list  are  thirty-nine  institutions.  Since  the  or- 
ganization of  the  Association  the  number  of  banks  con- 
stituting it  has  grown  to  127.  There  are  140  Savings 
Banks  doing  business  under  the  law  of  the  State. 


CHAPTER  II 

Second  Annual  Convention — First  Deaths  Reported,  Those  of 
Addison  C.  Miller,  Utica,  and  Harris  G.  Rogers,  Binghamton 
— Vigilant  Watching  of  Legislation — The  Elmira  Savings  Bank 
Case — Uniformity  in  Bank  Bookkeeping — An  Illuminating 
Discussion  of  an  Important  Subject — Views  of  President 
Rhoades. 

AT  THE  Second  Annual  Convention  which  was  held 
/-\  in  the  rooms  of  the  Chamber  of  Commerce,  32 
"^  "^  Nassau  Street,  New  York  City,  on  Wednesday, 
May  15,  1895,  the  representation  of  banks  had  increased 
from  thirty-nine,  at  the  first  Convention,  to  fifty-two. 
There  were  eighty-eight  banks  cooperating  in  the  tem- 
porary organization,  all  but  three  of  which  subsequently 
joined  the  permanent  organization,  which,  with  thirteen 
additional  ones,  made  the  total  membership  ninety-eight. 

In  pursuance  of  the  policy  of  the  Association  to  keep  in 
close  touch  with  all  proposed  legislation  affecting  Savings 
Banks,  it  had  been  decided  by  the  Executive  Committee 
prior  to  the  meeting  of  the  Convention  that  it  would  be 
advisable  to  secure  the  services  of  a  resident  agent  in  Al- 
bany, if  a  suitable  person  could  be  obtained.  Mr.  J. 
Howard  King,  President  of  the  Albany  Savings  Bank,  was 
deputed  to  seek  for  such  a  person,  and  upon  his  report  and 
recommendation  Mr.  Marcus  T.  Hun  was  engaged  for  the 
service,  viz.:  to  keep  the  Committee  and  banks  fully  in- 
formed as  to  all  bills  introduced  in  the  Legislature  af- 
fecting Savings  Banks  and  their  progress  from  time  to 
time;  to  appear  before  committees  of  the  Legislature  when 

30 


HISTORY  OF  THE  SAVINGS  BANKS  ASSOCIATION  31 

desired,  in  behalf  of  the  banks,  to  interview  such  members 
of  the  Legislature  as  he  deemed  necessary,  instructing  them 
concerning  the  merits  and  demerits  of  biUs.  Mr.  Hun's 
compensation  was  fixed  at  $1,000  for  the  year.  The  Com- 
mittee expressed  its  entire  satisfaction  with  Mr.  Hun's  ser- 
vices and  appreciated  his  usefulness  to  the  banks. 

ADDRESS   OF  PRESIDENT  RHOADES 

In  calling  the  Convention  to  order.  President  Rhoades 
said: 

It  is  with  a  feeling  of  sincere  pleasure  that  I  welcome  you 
to  the  second  annual  meeting  of  our  Association.  Bound 
together  by  no  selfish  ties,  and  acting  purely  in  the  inter- 
est of  the  great  mass  of  our  population,  who  through  con- 
fidence in  our  management  have  entrusted  to  our  care 
their  savings,  which  to  many  of  them  means  the  only 
barrier  which  exists  at  times  between  poverty  and  star- 
vation, it  is  well  that  we  join  hands  and  come  together 
to  consult  upon  the  best  means  obtainable,  not  only  to 
maintain  the  integrity  of  the  system  we  represent,  but  to 
broaden  its  usefulness  and  to  extend  the  beneficent  influ- 
ence of  thrift  and  economy  throughout  our  entire  popula- 
tion. 

As  I  look  back  upon  the  small  beginnings  of  the  Savings 
Banks  in  this  State,  and  think  that  out  of  deposits  amount- 
ing to  a  few  hundreds  of  thousands  of  dollars  at  the  start 
there  has  grown  up  an  aggregate  of  nearly  six  hundred  and 
fifty  millions  of  dollars  annually,  increasing  not  by  thou- 
sands but  by  millions;  and  then  reahze  what  a  power  for 
good  this  vast  sum  has  become,  not  only  in  the  benefits 
derived  by  the  single  depositor  but  in  the  practical  aid 
it  gives  to  the  development  of  our  cormnonwealth,  I  feel 
that  we  are  engaged  in  a  work  of  which  we  may  well  feel 
proud,  and  to  which  we  may  well  be  content  to  devote  our 
lives,  assured  that  in  the  faithful  discharge  of  the  duties 
thus  devolving  upon  us  we  are  acting  no  mean  part  in 


32  HISTORY  OF  THE  SAVINGS  BANKS 

making  our  own  lives  useful  to  our  fellow  citizens.  Let  our 
aim,  therefore,  in  the  future,  as  in  the  past,  be  to  guard  with 
care  this  great  trust  so  sacred  in  its  character  and  so  bene- 
ficial in  its  operations. 

I  wish  it  were  in  my  power  to  add  that  all  the  members 
present  last  year  are  again  here  to  add  the  weight  of  their 
wise  counsels  to  our  deliberations,  but  life  is  uncertain,  and 
it  is  with  sorrow  that  I  inform  you  of  the  death  of  two  of 
our  members:  Mr.  Addison  C.  Miller,  Treasurer  of  the 
Sa\dngs  Bank  of  Utica  and  a  member  of  our  Executive 
Committee,  died  December  i8, 1894. 

To  those  who  came  in  contact  with  IVIr.  Miller,  I  need 
not  say  one  word  of  commendation  to  strengthen  the  high 
regard  in  which  they  held  him  and  the  deep  sense  of  loss 
they  now  entertain.  No  member  of  this  Association  was 
more  devoted  to  its  interests;  no  man  could  be  more  un- 
selfish; no  counsel  more  wise;  no  friend  more  generous,  than 
he.  I  can  best  tell  you  how  he  was  regarded  in  the  com- 
munity in  which  he  lived  by  quoting  extracts  from  the 
leading  journals  in  Utica  \\Titten  at  the  time  of  his  death, 
in  which  they  say: 

''The  business  capacity  of  Mr.  Miller  was  simply  wonderful. 
Considered  as  a  banker,  as  a  manufacturer,  or  as  a  lawyer,  he 
achieved  signal  success  in  each  branch,  and  what  he  did  in  each 
would  have  constituted  the  life  work  of  any  one  man. 

"It  was  to  the  business  of  the  Savings  Bank,  however,  that  he 
gave  his  closest  personal  attention.  No  man  in  this  country  was 
more  familiar  with  all  the  details  of  this  business  than  he.  As  has 
been  stated,  he  was  the  Father  of  the  present  Savings  Bank  system 
of  this  State,  and  he  constantly  studied  how  he  could  improve 
the  system  and  throw  more  safeguards  around  the  interests  of  the 
depositors.  In  January  and  July  of  each  year  he  was  found  for 
four  weeks  at  the  Savings  Bank.  During  this  period  he  never 
went  near  his  office,  nor  could  any  one  see  him  at  the  bank  on  other 
than  bank  business.  His  place,  while  the  bank  was  open,  was  not 
behind  the  desk  but  in  front  of  it  in  the  crowd  of  depositors.  He 
would  inquire  into  the  business  of  each  and  give  them  many  sug- 
gestions which  were  timely  and  valuable.  His  constant  solicitude 
was  for  those  who  were  not  versed  in  financial  affairs  nor  accus- 
tomed to  the  handling  of  much  money.  When  one  of  these  drew 
an  amount  which  a  wage-earner  would  regard  as  large,  Mr.  Miller 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      ^s 

would  inquire:  *  What  are  you  going  to  do  with  this  money?  Are 
you  certain  you  have  a  safe  place  in  which  to  invest  it?'  And  then 
he  would  give  his  advice  as  to  the  prudence  of  the  moment." 


Another  journal,  speaking  of  his  death,  says: 


"In  the  life  so  unexpectedly  ended  there  was  more  practical, 
wholesome  good  than  it  is  the  fortune  of  most  mankind  to  possess. 
The  citizens  of  Utica  will  not  easily  appreciate  how  potent  and 
how  active  a  factor  death  has  just  removed  from  their  circles. 
Keenly  alive  to  the  welfare  and  interests  of  the  city,  he,  whom  all 
so  deeply  mourn,  has  devoted  his  unselfish  and  unceasing  service 
whenever  time  or  occasion  permitted.  To  the  poor  he  was  a  bene- 
factor, and  in  the  many  little  homes  made  possible  by  his  zeal  and 
wisdom  his  passing  will  be  mourned  and  his  memory  cherished. 
Such  a  life  was  worth  the  hving,  for  he,  who  lived  it,  will  be  re- 
membered as  a  public  benefactor. 

"Business  and  professional  men,  men  and  women  on  farms  and 
in  trade  throughout  this  whole  section,  men  employed  in  the  vari- 
ous industries  and  enterprises  in  which  he  was  a  leading  spirit, 
young  men  starting  out  in  life  and  those  in  whom  the  years  have 
nearly  run  their  course,  will  hear  of  the  death  of  Addison  C.  Miller 
with  sadness,  and  join  in  saying  he  was  a  true  friend,  a  kind  and 
sj^mpathetic  neighbor,  a  wise  and  safe  counsellor,  an  honest  man 
in  whom  there  beat  a  heart  rich  in  warm  friendship  and  filled  with 
generous  impulses." 


What  nobler  tribute  could  be  given  to  the  great  ones 
of  the  earth,  and  wherein  are  they  greater  than  he,  who 
gave  his  life  to  the  service  of  others,  and  by  his  unselfish 
deeds  done  to  his  fellowmen  fulfilled  the  words  of  the  great 
Prophet  and  Teacher  of  mankind  when  He  said:  "Inas- 
much as  ye  have  done  it  unto  the  least  of  these  my  brethren 
ye  have  done  it  unto  me." 

Mr.  Harris  G.  Rogers,  Treasurer  of  the  Binghamton 
Savings  Bank,  died  on  May  2,  1895;  a  man  of  sturdy 
independence  and  clear  thought,  devoted  to  our  interest, 
and  valued  alike  by  us,  and  in  the  community  in  which  he 
lived,  as  an  upright  man,  a  good  citizen,  and  a  christian 
gentleman.  From  both  of  these  lives  we  can  gather  much 
to  imitate,  much  to  cherish,  and  much  to  hold  in  sweet 


34  HISTORY  OF  THE  SAVINGS  BANKS 

remembrance,  as  of  chosen  friendships  in  life  which  are 
never  forgotten. 


WATCHING  LEGISLATION 

The  Executive  Committee  made  report  in  reference  to 
bills  affecting  Savings  Banks.  Few  possessed  any  novelty 
and  most  of  them  were  thoroughly  understood  by  bank 
officials.  One  of  these  bills  required  the  banks  to  send 
annually  between  January  5th  and  15th  to  each  depositor  a 
balance  statement  of  his  account.  It  was  shown  that  with 
banks  having  from  50,000  to  100,000  accounts  this  would 
be  impracticable  and  absurd.  Another  bill  introduced 
in  the  Senate  required  so-called  "dormant"  accounts 
of  seven  years  to  be  annually  reported  and  advertised. 
The  Committee  naively  remarked  that  the  advertising 
feature  of  this  bill  was  sufficiently  suggestive  of  its  object. 
Mr.  Kilburn  introduced  a  bill  requiring  a  separation  of 
premises  of  Savings  Banks  from  banks  of  discount.  An- 
other bill  was  introduced  concerning  the  ehgibility  of  bank 
trustees,  etc.,  and  Senator  Smelzer  introduced  a  bill  requir- 
ing annual  reports  to  the  Banking  Superintendent  of  all 
so-called  dormant  accounts  of  twelve  years'  standing,  in- 
cluding the  amounts  of  their  credit  balances,  and  requiring 
such  reports  to  be  open  for  public  inspection.  Twice  dur- 
ing the  session  the  Committee  visited  Albany  concerning 
legislation,  the  last  visit  being  in  connection  with  the 
Smelzer  bUl.  Seven  officers  of  the  banks  appeared  before 
the  Senate  Committee,  and  presented  strong  arguments 
against  the  passage  of  these  bills,  showing  the  apparent 
viciousness  of  their  intention,  which  opinion  was  endorsed 
by  the  Senate  Committee,  and  it  was  reported  that  all  of 
the  bills  relating  to  dormant  accounts  were  practically 
"dead."     It  was  further  reported  that  Senator  Klilburn's 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      35 

bill,  in  a  modified  form,  would  probably  become  a  law,  as 
well  as  that  relating  to  bankrupt  trustees. 

The  Elmira  Savings  Bank  case,  which  involved  the 
question  of  the  legality  of  Savings  Banks'  claims  as  pre- 
ferred creditors  of  National  Banks,  was  soon  to  come  before 
the  Supreme  Court  of  the  United  States,  and  the  Elmira 
bank  being  a  small  one  and  unable  to  bear  the  expense  of 
carrying  the  case  to  the  highest  court,  and  in  view  of  its 
importance,  the  Committee  recommended  the  employ- 
ment of  Mr.  James  C.  Carter,  of  New  York,  to  argue  the 
case  for  a  fee  of  $2,500,  and  that  this  being  an  extraordi- 
nary expense  it  be  assessed  upon  all  the  members  of  the 
Association.  This  was  subsequently  decided  upon,  thus 
early  showdng  the  great  benefits  of  the  organization. 

UNIFORMITY  IN  BANK  BOOKKEEPING 

One  of  the  most  interesting  and  valuable  papers  read 
before  the  Association  was  that  on  "Uniformity  in  Bank 
Bookkeeping,"  presented  at  this  meeting  by  Mr.  Charles 
E.  Sprague,  of  the  Union  Dime  Savings  Institution  of  New 
York.  Mr.  Sprague  presented  twelve  t>pes  of  Savings 
Banks  entries,  which  seemed  to  him  to  cover  all  the  regular, 
normal  transactions  of  any  possible  Sa\ings  Bank  doing 
business  under  the  New  York  law.  His  conclusions  were 
as  follows: 

Uniformity  in  bookkeeping  among  the  banks  is  neither 
desirable  nor  practicable.  The  best  methods  will  work 
themselves  out  by  each  studying  its  own  wants  and  by 
intelUgently  utilizing,  so  far  as  apphcable,  the  experience 
of  others,  to  which  end,  I  hope,  our  Association  will  greatly 
contribute.  The  supervising  authorities  should  judge 
by  results,  not  interfering  with  the  particular  way  in  which 
the  thing  is  done  by  asking:  ''Where  do  you  get  such  and 


36  HISTORY  OF  THE  SAVINGS  BANKS 

such  figures  which  you  present  to  me?"  and  condemning 
such  systems  as  do  not  furnish  ready  answers  to  their 
questions. 

PRESIDENT  RHOADES'  VIEWS 

In  discussing  the  paper  and  the  author's  conclusions, 
President  Rhoades  said: 


I  have  said  so  much  as  your  presiding  officer  that  I  in- 
tended to  keep  silent  now,  but  my  desire  and  the  desire  of 
the  officers  of  the  Association  is  that  there  shall  be  a  full 
and  frank  interchange  of  opinion  on  these  important  ques- 
tions, and  it  is  only  for  that  reason  that  I  venture  to 
address  you  for  a  few  moments,  in  the  hope  that  the  discus- 
sion will  become  somewhat  general  between  us.  I  confess 
candidly  that  this  is  the  first  time  I  have  seen,  or  heard 
read,  this  paper,  and  my  impressions  are  only  those  that 
come  to  my  mind  at  the  moment.  That  there  is  necessity 
for  good  bookkeeping  in  all  the  banks  in  the  State  there 
can  be  no  question.  So  far  as  the  large  banks  are  con- 
cerned, where  they  have  ample  resources  and  means  at 
their  command  to  employ  all  the  clerks  needed,  of  course 
an  intricate  system  of  bookkeeping  can  be  indulged  in,  as 
there  is  in  the  bank  which  I  represent;  and,  while  our 
system  is  adapted  to  our  pecuhar  needs,  we  find  among 
other  large  banks  that  their  systems  are  equally  good  for 
their  own  special  requirements.  The  trouble  in  my  mind 
has  been  this,  and  I  have  asked  myself  the  question :  How 
can  small  banks  surround  themselves  with  elements  of 
safety  so  that  the  trustees  can  feel  that  the  clerks  who  keep 
their  books  are  keeping  them  correctly,  and  that  there  are 
proper  checks  upon  them?  I  confess — and  I  agree  with 
Mr.  Sprague  in  that — that  I  do  not  think  any  one  system 
of  bookkeeping  can  be  adopted,  for  the  reason  that  a  small 
bank  must  employ  but  a  few  clerks.  In  a  small  bank  the 
teller,  who  is  paying  teller,  is  also  as  a  rule  receiving  teller; 
and,  not  only  that,  but  he  frequently  acts  as  bookkeeper. 
Therefore  a  transaction  with  that  bank  on  the  part  of  a 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      37 

depositor  is  one  in  which  one  man  makes  the  whole  course 
of  entries,  and  there  is  practically  no  check  upon  his  work 
except  the  innate  honesty  of  the  man,  and  in  this  view  I 
cannot  see  how  the  smaU  banks  can  surround  their  method 
of  bookkeeping  with  a  system  of  checks  which  will  mini- 
mize the  danger  of  loss.  It  has  always  seemed  to  me  that 
the  smaller  banks  in  the  State  ought,  at  certain  intervals, 
to  employ  a  thoroughly  competent  expert  to  examine  into 
their  condition,  and  not  leave  it  alone  to  the  State  Bank 
Examiner,  but  do  it  on  their  own  responsibility  and  for 
their  own  satisfaction,  and  I  believe  in  that  way  only  can 
they  be  fully  protected  from  loss.  Then,  I  think  there 
are  certain  general  rules  which  will  help  lessen  the  danger 
of  loss.  In  the  bank  that  I  represent  we  do  not  aUow  a 
trustee  or  any  clerk  to  keep  an  open  account  with  us.  If 
they  wish  to  open  an  account  with  a  Savings  Bank  it  must 
be  elsewhere.  In  fact,  the  law  forbids  a  trustee  to  have 
such  an  account.  In  that  way  we  diminish,  so  far  as  any 
personal  transactions  with  them  are  concerned,  the  liability 
of  their  making  drafts  on  their  own  account,  they  having 
control,  as  it  were,  of  the  receipt  and  payment  of  moneys. 
I  think  this  is  a  rule  which  it  would  be  well  for  all  the  banks 
in  this  State  to  establish.  More  than  that,  I  think  there 
should  be  frequent  examinations — that  is,  say  at  least 
once  in  three  years — by  an  expert  accountant  entirely 
outside  of  the  bank  itself.  This  wiU  aid  a  great  deal  in 
securing  safety.  Then,  too,  I  think  that  in  the  employ- 
ment of  clerks,  they  should  start  in  as  young  men  who 
should  be  promoted  from  time  to  time  as  their  efficiency 
warrants,  and  as  vacancies  occur,  and  that  they  should  not 
be  promoted  at  aU  because  of  any  favoritism  on  the  part 
of  any  officer  or  trustee  of  the  bank.  In  my  own  bank  we 
have  this  rule  established,  and  with  us  no  clerk  is  employed 
unless  he  starts  with  a  moderate  salary,  say  $500  a  year. 
If  he  is  found  efficient  he  retains  his  position,  and  as  vacan- 
cies occur  he  is  promoted.  In  no  instance  have  I  ever,  as 
President  of  the  bank,  permitted  any  outsider  to  come  into 
our  employ  over  the  heads  of  clerks  already  in  the  bank. 


38  HISTORY  OF  THE  SAVINGS  BANKS 

No  trustee  is  allowed — if  I  may  use  that  expression — to 
secure  the  appointment  of  any  outsider  to  overtop  men 
akeady  in  the  service  of  the  bank.  In  this  way  we  think 
we  gain  the  best  efforts  of  the  men  we  employ.  They  feel 
whatever  chance  there  is  in  the  bank  in  the  way  of  ad- 
vancement becomes  their  property;  and,  whether  it  is  the 
system,  or  whether  it  is  because  we  have  been  particularly 
fortunate,  I  am  happy  to  say  that  during  my  connection 
with  the  bank,  and  that  has  been  ever  since  I  was  twenty- 
four  years  of  age,  we  have  never  had  a  defalcation.  So 
well  has  this  system  worked  with  us  that  we  have  never 
required  bonds  to  be  given  for  a  single  clerk.  The  esprit 
de  corps  has  been  so  weU  estabHshed  with  us  that  I  have 
been  averse  to  requiring  bonds  from  our  clerks,  because 
I  have  felt  that  it  would  disturb  the  existing  status  be- 
tween the  clerks^  the  officers,  and  the  trustees. 


CHAPTER  III 

Third  Annual  Convention — Return  of  Prosperity  Delayed  by  the 
Spread  of  Financial  Heresies — Trade  Paralyzed  and  Commerce 
Stagnated — The  Association  Rallies  to  the  Gold  Standard — 
Mr.  McMahon's  Resolution — Efifect  of  Derangement  of  the 
Currency  upon  the  Savings  Banks — More  Objectionable  Bills 
Killed  in  Their  Inception^ — Notable  Address  of  Supt.  Kilburn, 
of  the  Banking  Department — Mr.  S.  R.  Rainey's  Services 
Suitably  Recognized — Important  Topics  Discussed. 

THE  most  important  subject  considered  at  the  Third 
Annual  Convention  of  the  Association,  held  on  the 
2oth  day  of  May,  1896,  was  that  of  the  inflation  of 
the  currency  The  hoped-for  return  of  prosperity  was  de- 
layed by  mistaken  ideas  of  finance  and  a  disordered  and 
ill-arranged  currency  system,  which  not  only  produced 
inflation  but  engendered  a  deep-seated  feeling  of  distrust 
which  did  much  to  paralyze  trade  and  commerce  and  cause 
stagnation  in  all  branches  of  business. 

RALLYING  TO  THE   GOLD   STANDARD 

In  referring  to  the  existing  conditions  and  the  prospect 
of  improvement.  President  Rhoades,  in  his  opening  address 
to  the  delegates,  said: 

I  wish  I  could  congratulate  you  upon  the  return  of  an 
era  of  prosperity  to  our  country,  so  vital  to  the  working 
classes,  but  mistaken  ideas  of  finance  and  a  disordered  and 
ill-arranged  currency  system  have  not  only  produced 
inflation,  from  the  evil  consequences  of  which  we  are  now 
suffering,  but  have  also  produced  a  deep-seated  feeling  of 

3Q 


40  HISTORY  OF  THE  SAVINGS  BANKS 

distrust,  which  has  done  much  to  paralyze  trade  and  com- 
merce and  cause  stagnation  in  all  branches  of  business. 

In  my  judgment,  and  I  believe  in  your  own,  we  cannot 
hope  and  expect  the  return  of  prosperity  until  the  currency 
question  is  settled  upon  a  basis  which  will  place  and  keep 
our  credit  equal  to  that  of  the  most  favored  nations  of 
the  world.  Whether  the  time  for  this  settlement  is  near 
or  far  distant  will  largely  depend  upon  the  results  of  the 
coming  election;  and,  indeed,  upon  the  issues  now  at  stake 
rests  the  welfare  of  the  people  at  large,  and  especially  those 
whom  we  so  largely  represent,  for,  as  we  know  full  well, 
those  who  gain  the  most  through  a  sound  currency,  or  lose 
and  suffer  most  through  one  that  is  inflated  and  in  a  dis- 
ordered condition,  must  be  the  laborer  and  the  producer. 
Let  us  hope  and  believe  that  the  judgment  and  good  sense 
of  the  common  people,  who  have  always  been  the  strength 
and  mainstay  of  our  country  in  its  time  of  need,  and  the 
great  mass  of  whom  are  not  only  honest,  but  think  deeper 
than  we  are  apt  to  imagine,  upon  all  matters  which  affect 
the  welfare  of  the  community,  will  settle,  at  this  coming 
election,  once  and  for  all,  this  momentous  currency  ques- 
tion, which,  for  the  past  ten  years,  has  disturbed  our  com- 
merce and  blocked  our  progress  as  a  nation,  and  render  at 
the  polls  a  verdict  w^hich  will  determine  for  all  time  the 
fact  that  the  people  of  the  United  States  of  America  will 
not  consent,  under  any  condition  or  through  any  compro- 
mise, to  depart  from  the  standard  of  value  which  is  rec- 
ognized by  all  the  civilized  nations  of  the  world  as  the 
best  and  only  standard  to  maintain. 

As  is  usual  in  times  of  depression  and  doubt  and  uncer- 
tainty, the  Savings  Banks  located  in  the  larger  cities,  and 
especially  in  the  great  centre  of  trade,  are  apt  to  increase 
largely  in  deposits  owing  to  the  depositing  of  moneys  by 
the  middle  classes,  who  are  unwilling  to  enter  upon  new 
ventures  or  entertain  an  expansion  of  business  and  use 
the  banks  as  a  safe  depositor}'  until  restored  confidence 
tempts  them  to  employ  their  savings  in  the  ordinary  chan- 
nels of  trade;  and  so  we  are  not  deceived,  and  the  public 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      41 

should  not  be  deceived,  in  the  idea  that  increased  deposits 
in  Savings  Banks  during  the  past  few  years  indicate  a 
general  condition  of  prosperity,  for  such  is  not  the  case. 
The  deposits  in  the  Savings  Banks  of  this  State  from  1873 
to  1877,  inclusive,  constantly  increased,  and  it  was  not 
until  1878  that  the  exhaustion  of  the  people  really  showed 
itself  in  its  true  light,  and  the  banks  failed  to  show  an 
annual  gain  in  deposits. 

Your  Executive  Committee  will  give  you  a  full  report  of 
all  action  on  your  behalf  taken  by  them  during  the  past 
year,  but  I  cannot  refrain  from  commenting,  for  a  mo- 
ment, upon  that  taken  in  regard  to  a  bill  introduced  in  the 
Legislature  to  permit  of  investment  by  the  banks  in  the 
bonds  of  the  cities  of  Springfield  and  Newark,  to  which  was 
subsequently  added  Kansas  City.  When  this  last  city 
was  added,  it  became  evident  that  a  serious  effort,  backed 
by  political  and  personal  interests,  was  being  made  to 
force  the  bill  through  the  Legislature,  with  every  probabil- 
ity of  success.  The  officers  of  your  Association  felt  that 
the  time  had  come  when  the  full  power  of  your  Organiza- 
tion must  be  exercised  to  prevent  this  legislation,  not  only 
because  we  were  unwilling  to  have  this  city  admitted  to 
the  Ust,  but  because  we  felt  that  if  bills  of  this  character 
were  to  be  introduced,  without  consultation  with  the 
banks,  and  pushed  into  law,  it  would  be  but  a  few  years 
before  the  safeguards  now  surrounding  us  would  be  bro- 
ken down  and  the  integrity  of  the  Savings  Bank  system 
demolished. 

As  you  are  aware,  for  ten  years  we  struggled  hopelessly 
to  secure  an  increased  scope  of  investment,  based  upon 
conservative,  and  as  we  believed  thoroughly  sound,  views 
of  financial  legislation;  and  when  the  relief  came  we  all 
recognized  that  it  was  given  grudgingly  to  others  inter- 
ested and  not  to  ourselves,  and  after  a  positive  refusal  to 
entertain  the  bill  introduced  through  our  action. 

If  such  has  been  and  is  likely  to  be  the  temper  of  the 
Legislature,  then  it  becomes  of  the  utmost  importance  to 
the  Savings  Banks  that  we  should  defeat  this  class  of  legis- 


42  HISTORY  OF  THE  SAVINGS  BANKS 

lation  introduced  by  private  parties  and  solely  for  per- 
sonal and  selfish  ends. 

Therefore  it  is  a  source  of  pleasure  and  gratification  to 
state  that  our  efforts  in  this  instance  proved  successful, 
and  that  in  these  efforts  we  were  aided  and  benefited 
largely  by  the  advice  and  personal  efforts  of  Mr.  Kilbum, 
the  Superintendent  of  the  Banking  Department,  who  threw 
at  once,  and  without  hesitation,  the  weight  of  his  power 
and  influence  in  the  scale  and  fought  earnestly  and  loyally 
to  defeat  the  measure,  which  he,  with  ourselves,  felt  to  be 
at  least  unwise,  if  not  unsafe,  in  its  character.  Had  the 
interests  at  work  in  favor  of  this  measure  been  powerful 
and  determined  enough  to  force  its  passage  through  the 
Legislature,  you  may  rest  assured  that  your  officers  would 
have  called  into  action  the  reserve  power  of  every  bank  in 
our  Association  to  sustain  them  in  their  efforts.  In  con- 
templation of  the  necessity  for  this,  they  counted  \vith 
perfect  confidence  upon  your  loyal  support,  knowing  that 
you  share  with  them  the  feeling  that  the  integrity  of  our 
present  Banking  Law  must  be  maintained  at  all  hazards. 

There  is  a  subject  which  I  deem  worthy  of  your  atten- 
tion and  to  which  we  ought  to  give  careful  consideration, 
and  that  is  the  necessity  for  laws  in  every  State  of  the 
Union,  compelling  aU  municipal  bonds,  whether  city, 
county,  town,  or  village,  to  be  properly  registered  in  the 
office  of  some  reputable  bank  or  trust  company.  The 
aggregate  issue  of  this  class  of  security  equals,  if  it  does 
not  exceed,  the  issue  of  railroad  and  corporate  bonds,  and 
if  the  pubUc  demand,  as  they  do,  the  registration  of  this 
class  of  security,  equally  important  is  it  that  the  legality 
and  totality  of  all  municipal  debts,  as  represented  by  bonds 
and  certificates  of  indebtedness,  should  be  certified  as  cor- 
rect. As  the  matter  now  stands,  the  integrity  of  the 
officers  charged  with  such  issues  is  the  only  safeguard  we 
have  against  over-issue,  and  in  my  judgment  the  risk 
assumed  by  purchasers  is  far  greater  than  we,  or  the  public 
at  large,  are  aware.  The  sooner  this  subject  is  agitated, 
and  the  attention  of  the  legislators  of  the  various  States 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      43 

is  called  to  its  importance,  the  better  it  will  be  for  the  in- 
vestor and  the  safer  for  the  community. 

We  have  lately  had  an  instance  of  an  issue  of  a  large 
amount  of  bonds  by  the  authorities  of  one  of  our  largest 
cities  in  the  State,  which  has  passed  without  comment,  but 
which  shows  the  dangers  possible  surrounding  the  issue 
of  mimicipal  securities.  The  debt  of  the  city  of  Brooklyn 
had  approached  its  constitutional  limit — the  merging  of 
the  county  of  Kings  into  the  city  of  Brooklyn  was  deter- 
mined upon  and  the  date  fixed.  Within  the  year  preced- 
ing such  consoUdation,  the  debt  of  that  county,  which 
practically  was  covered  by  the  city  of  Brooklyn,  was 
nearly  doubled;  in  fact,  increased  from  $8,<xx),ooo  to 
$16,000,000,  and  of  this  increase  more  than  $4,000,000  was 
created  within  four  weeks  of  the  expiration  of  the  existence 
of  the  county  and  of  the  officers  authorized  to  make  such 
issue;  and  all  of  this  without  one  word  of  protest  made 
either  by  the  authorities  of  Brooklyn  or  of  the  Savings 
Banks,  who  hold  at  least  one  half  of  the  debt  of  this  city. 
That  these  issues  were  legal,  I  have  no  doubt,  but  what 
shall  be  said  of  the  moral  legaHty  of  such  an  issue,  and 
what  of  the  dangers  which  may  exist  in  the  future  if  pro- 
ceedings such  as  these  shall  pass  unchallenged? 

Gentlemen,  the  whole  subject  is  a  grave  one  and  should 
receive,  as  I  have  already  said,  your  careful  attention;  and 
the  necessity  for  this  will  be  commented  upon  seriously  in 
the  report  of  your  Executive  Committee. 

There  is  still  another  matter  to  which  I  feel  your  atten- 
tion ought  to  be  called,  and  it  is  this:  Under  the  Act  con- 
soHdating  the  cities  of  Brooklyn,  Long  Island  City,  and 
Richmond  County  into  and  with  the  City  of  New  York, 
under  the  term  of  the  Greater  New  York,  it  is  evident, 
from  objections  made  before  the  mayors  of  these  cities  and 
by  the  terms  of  the  mem.oranda  filed  by  the  Governor  of 
the  State  in  connection  with  his  approval  of  this  biU,  that 
the  right  of  the  counties  of  New  York  and  Kings  to  borrow 
money  independently  of  the  cities  named  wiU  be  restored. 
If  this  be  so,  then  the  constitutional  limit  of  ten  per  cent. 


44  HISTORY  OF  THE  SAVINGS  BANKS 

indebtedness  on  the  assessed  valuation  of  real  property- 
contained  in  the  city  will  be  practically  evaded  and  a 
large  debt  be  ultimately  created,  outside  and  in  addition 
to  the  city  debt,  equal  in  its  limit  to  ten  per  cent,  on  the  as- 
sessed valuation  of  the  county,  which  is,  of  course,  the 
same  as  the  city,  thus  practically  annulling  the  wise  pro- 
vision now  existing,  that  the  debt  limit  of  cities  shall  be 
fixed  by  law,  and  creating  a  possibihty  for  doubhng  this 
debt  limit. 

The  Savings  Banks  of  this  State  now  hold  nearly  if  not 
one  half  of  the  entire  net  debt  of  the  cities  composed  in  the 
Greater  New  York,  a  sum  equal  to  at  least  $70,000,000. 
It  is  therefore  of  the  utmost  importance  that  our  influence 
should  be  exercised  with  the  Commission  to  be  appointed 
by  the  Governor,  to  prepare  a  Charter  for  our  new  and 
larger  city,  to  so  properly  adjust  the  existing  debts  of  these 
cities  as  is  equitable  and  fair  to  each,  and,  more  than  aU, 
to  prevent  the  possibility  of  an  undue  increase  of  the  same, 
especially  in  the  direction  of  the  powers  to  be  given  to  re- 
store Boards  of  County  Supervisors;  for  upon  these  grave 
financial  issues  rests,  for  many  years  to  come,  the  future 
credit  of  our  city,  which  heretofore  has  been  of  the  highest 
and  best  in  its  character.  The  whole  subject,  in  this  re- 
gard, is  fraught  with  danger  and  anxiety,  and  we  cer- 
tainly should  take  some  action  thereon. 

In  bringing  these  various  matters  to  your  attention,  I 
beg  of  you  to  observe  that  I  have  done  so  entirely  on  my 
own  responsibility  and  only  through  a  desire  to  call  to 
your  mind  matters  which  seem  to  me  should  be  laid  before 
you,  ultimately  to  receive  the  stamp  of  your  wise  decision, 
whatever  it  may  be. 

Since  the  last  meeting  of  this  Association  there  has  oc- 
curred the  death  of  John  B.  Edwards,  President  of  the 
Board  of  Trustees  of  the  Oswego  County  Savings  Bank. 
He  was  a  prominent  citizen  of  Oswego,  ha\dng  settled  in 
that  city  in  the  year  1824.  He  held  various  positions  of 
trust,  and  rightly  earned  the  confidence  and  respect  of  the 
entire  community  in  which  he  lived.    He  was  a  man  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      45 

ability,  honesty,  and  integrity,  earnestly  devoted  to  the 
welfare  of  the  Savings  Bank  of  which  he  was  the  honored 
President  up  to  last  year,  when  declining  health  led  him 
to  retire  from  the  office  he  had  for  so  long  a  time  ably  fUled. 

In  1895,  ^t  the  time  of  his  resignation,  the  Board  of 
Trustees  of  that  bank  passed  a  series  of  resolutions,  one  of 
which  it  is  well  to  refer  to  here,  as  indicative  of  the  char- 
acter of  the  man. 

^^ Resolved,  That  during  aU  these  years  (21  in  number)  we 
have  ever  found  Mr.  Edwards  faithful  to  aU  his  duties, 
keeping  careful  watch  over  the  business  and  interests  of  the 
bank,  soUcitous  for  its  high  financial  standing  and  good 
name,  and  faith  with  all  of  its  depositors  and  the  pubHc, 
and  ever  vigilant  and  progressive  in  all  his  duties  in  rela- 
tion to  the  bank,  and  striving  continually  to  build  up  a 
strong,  conservative,  and  progressive  financial  institution 
in  our  midst." 

In  his  death,  gentlemen,  this  Association  has  lost  a  firm 
friend  and  wise  counsellor,  and  we,  with  his  associates  and 
fellow-citizens,  appreciate  the  man  and  share  the  sense  of  loss 
occasioned  by  his  death. 

This  Association  may  have  lost  during  the  past  year 
other  men  whose  names  stood  equally  high  with  that  of 
Mr.  Edwards,  but  men,  perhaps,  not  known  to  us,  but 
who,  as  officers  and  trustees,  ever  took  as  warm  an  interest 
and  proved  as  faithful  to  their  duties  as  John  B.  Edwards. 
If  I  have  failed  to  mention  them  by  name  it  is  because, 
being  strangers  to  me,  I  have  not  been  made  aware  of  their 
character  and  their  worth. 

And  now,  gentlemen,  thanking  you  for  the  patience  with 
which  you  have  listened  to  what  I  have  had  to  say,  and 
expressing  anew  my  loyalty  to  this  Association  and  my 
gratification  upon  the  success  which  thus  far  has  crowned 
our  efforts  to  join  hand  in  hand  in  furthering,  perfecting, 
and  protecting  the  Savings  Bank  Law  of  this  State,  which 
I  claim,  and  which  is  recognized  to  be  the  best  law  of  its 
kind  upon  the  statute  books  of  any  State  of  the  Union,  we 
wiU  proceed  to  the  business  which  lies  before  us. 


46  HISTORY  OF  THE  SAVINGS  BANKS 

Mr.  McMahon,  in  accordance  with  the  sentiment  ex- 
pressed by  the  President,  in  his  address  to  the  Association 
in  reference  to  sound  money,  offered  the  following  resolu- 
tion : 

Resolved,  That  this  Association,  representing  the  inter- 
ests of  1,700,000  depositors,  with  deposits  aggregating 
over  $700,000,000,  solemnly  protests  against  any  and  all 
efforts  to  change  the  gold  standard  now  existing  for  the 
currency  of  the  country,  and  affirras  its  conviction  that 
any  departure  from  this  standard  will  not  only  impair  the 
prosperity  of  the  laboring  classes,  but  that  the  only  classes 
or  individuals  to  be  benefited  would  be  the  capitaUst  and 
foreign  investor,  who  would  be  quick  to  take  advantage 
of  the  rise  and  ultimate  faU  in  prices  sure  to  follow  a 
premium  on  gold. 

Resolved,  That,  in  our  judgment,  the  future  prosperity 
of  the  country  and  the  welfare  of  the  people  demand  not 
only  that  the  gold  standard  shall  be  maintained,  but  the 
currency  system  now  in  use  shall  be  so  changed  and  re- 
modeled as  to  meet  and  adapt  it  to  the  increasing  needs  of 
commerce,  and  equal  in  security  and  credit  with  the  best  in 
circulation  by  any  of  the  civiHzed  nations  of  the  earth. 

Resolved,  That  certified  copies  of  these  resolutions  be 
sent  to  the  President,  to  each  member  of  Congress,  to  the 
Governor  of  this  State,  and  generally  to  the  press  through- 
out the  country. 

Mr.  J.  P.  Townsend  said:  I  would  like  to  second  Mr. 
McMahon's  resolutions.  It  seems  to  me  a  very  important 
matter  that  the  currency  of  this  country  should  be  of  the 
best.  That  the  interests  of  the  large  number  of  Savings 
Bank  depositors,  not  only  of  this  State  but  in  all  States 
where  they  exist,  would  be  affected  detrimentally  by  a 
change  of  currency.  The  silver  standard  or  free  coinage 
law,  as  we  understand  it,  allows  the  owners  of  fifty-one 
cents'  worth  of  silver  to  take  it  to  the  mint  and  have  it 
coined  into  legal  tender  for  one  hundred  cents.     We  all 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      47 

know  what  effect  a  derangement  of  the  currency  had  upon 
Savings  Banks  at  the  beginning  of  the  war.  We  all  know 
that  the  people  came,  when  they  found  they  could  not  get 
gold  for  their  deposits  and  had  to  take  paper,  and  de- 
manded their  gold;  and  that  there  was  a  great  commotion 
and  a  run  on  the  banks.  There  is  nothing  so  sensitive  as 
capital;  there  is  nothing  so  sensitive  as  a  Savings  Bank 
depositor.  As  soon  as  it  is  understood  that  he  is  to  receive 
his  deposits  in  depreciated  currency,  he  will  very  soon  come 
and  draw  his  money  out  through  fear,  and  that  fear  will 
lead  him  to  go  into  unwise  things;  and  the  effect  of  all 
lessons  he  has  been  taught  since  the  organization  of  the 
system,  now  some  eighty  years,  will  be  damaged  if  not 
destroyed.  I  therefore  very  heartily  second  these  resolu- 
tions.    The  resolutions  were  adopted  unanimously. 


MORE   OBJECTIONABLE   BILLS   KILLED 

The  bills  introduced  in  the  Legislature  at  its  previous 
session  included  these: 

By  Mr.  Myers:  Requiring  all  Savings  Banks  and  Sav- 
ings Institutions  to  notify  annually  each  depositor  thereof, 
by  mail,  of  all  balances  standing  to  the  credit  of  such  depos- 
itor. 

A  bill  introduced  in  both  Houses  amending  the  Banking 
Law,  the  effect  of  which  would  be  to  vacate  the  offices  of  all 
trustees  of  Savings  Banks  who  were  not  residents  of  the 
cities  where  said  banks  were  located. 

A  bill  amending  an  act  in  relation  to  loans  upon  bonds 
and  mortgages,  the  purport  of  which  amendment  was  to 
permit  loans  of  Savings  Banks  upon  bonds  and  mortgages 
on  real  estate  to  the  extent  of  eighty -five  per  cent,  of  the 
whole  amount  of  their  deposits. 

AH  these  bills  were  deemed  highly  objectionable,  and  the 
President  and  four  other  members  of  the  Executive  Com- 
mittee went  to  Albany  and  presented  objections  and  argu- 
ments against  their  passage. 


48  HISTORY  OF  THE  SAVINGS  BANKS 

Mr.  Kilbum,  Superintendent  of  the  Banking  Depart- 
ment, also  appeared  before  the  Committee  on  Banks  at  the 
same  time  and  sustained  the  objections  made,  with  a  clear 
and  forcible  argument,  and  the  delegation  left  with  a 
strong  impression  that  the  bills  would  not  be  approved  by 
the  Committee  having  them  in  charge. 

Other  bills  were  introduced  which  the  Executive  Com- 
mittee did  not  deem  it  necessary  to  act  upon  as  a  Com- 
mittee; individually,  some  objections  were  made,  and  it  was 
thought  that  none  of  them  would  be  passed. 

The  attention  of  the  Committee  was  drawn  by  one  of 
the  members  of  the  Association  to  a  condition  of  the  Sav- 
ings Banks  as  left  by  recent  legislation,  and  it  was  found 
upon  a  careful  examination  that  the  existing  law  left  no 
provision  for  increasing  or  diminishing  the  membership  of 
trustees  of  Savings  Banks,  in  view  of  which  it  was  deemed 
desirable  to  obtain  legislation  to  remedy  this  defect.  Ac- 
cordingly a  bill  therefor  was  prepared  and  introduced,  and 
was  passed. 

The  Committee,  after  due  consideration:  Resolved,  That 
it  was  very  desirable  and  important  that  stocks  and  (or) 
bonds  issued  by  municipaHties,  and  that  are  legal  invest- 
ments of  Savings  Banks,  should  be  certified  to  by  a  re- 
sponsible trust  company  or  other  properly  authorized  cor- 
poration as  being  legally  issued,  and  the  loan  represented 
by  the  certificate  described  thereon. 

Copies  were  printed  and  sent  to  officials  throughout  the 
State. 

J.  P.  Townsend,  President  of  the  Bowery  Savings  Bank, 
offered  this  resolution : 

Resolved,  That  in  the  opinion  of  the  Executive  Commit- 
tee of  the  Savings  Banks  Association  of  the  State  of  New 
York,  it  is  desirable,  in  regard  to  the  stocks  and  bonds  is- 
sued by  municipalities  in  which  by  law  any  part  of  the 
funds  of  the  Savings  Banks  of  the  State  may  be  invested, 
that  each  certificate  and  bond  should  be  attested  after 
examination  by  a  responsible  trust  company  or  other  proi>- 
erly  authorized  corporation,  and  certified  as  part  of  a 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK     49 

total  issue  of  a  described  loan  which  was  duly  authorized 
and  is  in  all  respects  legally  issued. 

This  resolution  was  adopted. 

ADDRESS   OF   HON.   F.   D.   KILBURN 

F.  D.  Kilburn,  Superintendent  of  the  State  Banking  De- 
partment, addressed  the  Convention  as  follows: 

Mr.  President  and  Gentlemen :  I  did  not  suppose  when 
I  came  into  the  room  that  I  should  be  called  upon  to  say 
anything  to  you  to-day,  and  I  do  not  understand  that  it 
is  in  accordance  with  the  program  which  has  been  made 
up  for  this  occasion.  I  came  here  for  the  purpose  of  learn- 
ing something,  and  not  because  I  thought  for  a  moment 
that  I  could  tell  you  anything.  I  am  glad  to  come  here 
to-day  for  the  purpose  of  learning  more  than  I  could  per- 
haps otherwise  about  the  Savings  Banks  of  the  State  and 
the  Savings  Banks  Association.  I  have  hstened  with  a 
great  deal  of  interest  to  the  address  of  your  President,  and 
to  the  report  of  the  Chairman  of  your  Executive  Com- 
mittee, and  I  heartily  endorse  everything  that  they  say, 
except,  of  course,  that  which  they  have  said  in  refer- 
ence to  myseK.  I  agree  entirely  in  the  views  they  express 
■with  regard  to  the  necessity  of  this  Association  paying 
strict  attention  to  all  laws  which  are  introduced  into  our 
Legislature  affecting  Savings  Banks.  There  is  a  great 
misconception  on  the  part  of  many  people  in  the  State, 
including  some  legislators,  as  to  the  exact  functions  and 
powers  and  duties  of  Savings  Banks.  Why,  I  have  had 
such  questions  asked  me,  and  I  presume  it  comes  within 
the  experience  of  all  of  you:  "Who  owns  the  surplus  in  a 
Savings  Bank?"  It  is  the  popular  idea,  or  at  least  the 
idea  with  a  great  many,  that  the  officers  or  those  in  charge 
of  the  bank,  or  the  trustees  of  the  bank,  own  the  surplus 
and  have  the  absolute  disposition  of  it.  I  have  been  told, 
too,  that  the  buildings  some  of  the  Savings  Banks  have 
built  have  been  built  or  brought  from  the  dormant  ac- 


50  HISTORY  OF  THE  SAVINGS  BANKS 

counts  in  the  Savings  Banks,  that  they  have  been  appro- 
priated for  that  purpose.  AU  sorts  of  notions  prevail 
with  a  great  many  people  of  the  State.  This  accounts 
perhaps  for  some  of  the  bills  which  are  introduced  in  the 
Legislature.  I  wish  to  assure  you,  gentlemen,  that  I  be- 
Heve  both  the  houses  of  the  Legislature  this  year  had  good 
Banking  Committees.  I  believe  that  the  experience  of 
your  Executive  Committee  before  these  Committees  will 
substantiate  this  statement.  Some  of  the  members  per- 
haps of  the  Committees  did  not  \aew  the  subjects  before 
them  relating  to  Savings  Banks  in  exactly  the  proper  light, 
but  the  majority  of  both  Committees  took  a  reasonable 
and  sensible  view  of  the  bills  which  were  introduced,  and 
finally  the  view  taken  by  your  Executive  Committee.  I 
believe  that  no  bill  succeeded  in  passmg  the  Legislature 
this  year  which  any  of  you  would  consider  as  detrimental 
to  the  interest  of  the  Savings  Banks. 

A  Savings  Bank  cannot,  it  seems  to  me,  practise  too 
much  conservatism.  Conservatism  is  out  of  place  in 
regard  to  some  things,  but  that  statement  does  not  apply 
to  Savings  Banks.  You  have  in  your  custody  the  keeping 
of  the  people's  money,  the  common  people's  money,  if  you 
will;  the  working  people;  the  people  who  tr}^  to  save  from 
their  wages  and  from  their  earnings.  It  seems  to  me  that 
it  goes  without  saying  that  you  cannot  be  too  careful ;  that 
you  cannot  exercise  too  much  care  or  too  much  conserv- 
atism with  regard  to  the  investment  of  these  funds.  I  do 
not  believe  there  are  any  financial  institutions  in  this 
country  so  conservative  as  the  Savings  Banks  of  the  State 
of  New  York.  To  be  sure  you  are  guided  and  controlled 
by  laws,  which  it  has  been  well  said  are  wise  laws;  the  best 
perhaps  existing  in  this  country'  in  reference  to  Savings 
Banks.  You  cannot  invest  your  money  outside  of  the 
way  which  these  laws  say  you  may;  and  the  laws  should 
restrict  you  with  regard  to  your  investments.  If,  for 
instance,  the  bill  had  passed  which  sought  to  add  Kansas 
City  to  the  Ust  of  cities  in  this  country  in  whose  securities 
you  might  invest,  while  the  people  here  in  the  City  of  New 


ANDREW    AULLS 


PRESIDENT.  igOO-Ol 
TREASURER,  1894-99 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      51 

York,  or  perhaps  in  some  other  parts  of  the  State  of  New 
York,  would  not  have  taken  advantage  of  that  law  and 
invested  in  such  security,  there  would  be  people  somewhere 
in  the  State  attracted  perhaps  by  the  higher  rate  of  inter- 
est who  would  invest  in  such  security,  and  who  might 
thereafter  be  sorry  for  having  done  so.  So  I  say  that  the 
utmost  conservatism  should  not  only  be  practised  with 
reference  to  the  laws  passed  by  our  Legislature,  but  by 
every  officer  who  has  any  control  of  Savings  Banks  in  this 
State  in  reference  to  the  investments  made  by  you  of  the 
money  in  your  charge. 

I  wish  to  congratulate  you,  gentlemen,  upon  the  condi- 
tion of  the  Savings  Banks  of  this  State.  I  do  not  pretend 
to  know  all  about  you.  I  do  not  pretend  to  know  half, 
perhaps,  about  you.  But  I  have  undertaken  to  ascertain 
enough  about  you  to  be  able  to  state  that  I  believe  that 
no  safer  financial  institutions  exist  in  this  country  than 
the  Savings  Banks  of  the  State  of  New  York. 

Report  was  made  of  the  decision  of  the  United  States 
Supreme  Court,  holding  that  deposits  of  Savings  Banks 
with  National  Banks  (the  Elmira  Savings  Bank  case) 
could  not  be  made  preferred  debts. 

MR.   RAINEY'S    services   RECOGNIZED 

The  following,  offered  by  Mr.  Andrew  Mills,  and  sec- 
onded by  Mr.  J.  B.  Curry,  was  unanimously  adopted: 

Resolved,  That  in  accordance  with  the  report  of  the 
Executive  Committee,  the  thanks  of  this  Association 
be  and  hereby  are  tendered  to  Mr.  Samuel  R.  Rainey, 
Treasurer  of  the  Hudson  City  Savings  Institution,  for 
the  valuable  services  rendered  by  him  to  this  Associa- 
tion. 

Mr.  Mills,  in  offering  the  resolution  at  the  request  of  the 
Chairman  of  the  Executive  Committee,  said :  I  do  it  with 
great  personal  pleasure.     There  is  no  man  in  this  Associa- 


52  HISTORY  OF  THE  SAVINGS  BANKS 

tion  from  the  President  down  that  has  done  more  real 
hard  work  for  the  defeat  of  vicious  legislation  during  the 
last  session  of  the  Legislature  than  that  done  by  Mr. 
Rainey.  It  did  not  make  any  difference  what  time  it  was 
when  he  was  called  upon,  nor  what  the  duty  was,  he  did  it 
cheerfully  and  very  effectively.  I  think  that  our  friends 
here  should  recognize  it  not  merely  in  the  formal  passage 
of  a  resolution,  but  by  this  statement  which  I  make,  which 
is  prompted  by  a  desire  that  the  efforts  of  a  worthy  man 
should  be  fully  appreciated. 

The  President  said :  Your  President  takes  great  pleas- 
ure in  endorsing  this  resolution  and  what  Mr.  Mills 
has  said,  for  I,  perhaps,  of  aU  others,  know  the  work  Mr. 
Rainey  has  done  for  this  Association  during  the  past  win- 
ter at  Albany,  He  has  been  indefatigable  in  his  efforts; 
not  only  has  he  attended  meetings  of  Committees,  but 
he  has  gone  to  individual  members  of  the  Legislature. 
He  has  used  persuasion  and  argument,  and  given  them  in- 
formation which  they  never  could  or  would  have  obtained 
in  any  other  way  or  from  any  other  source.  I  do  really 
feel  that  Mr.  Rainey  has  done  us  invaluable  service  since 
the  last  meeting  of  this  Association.  Therefore  it  gives 
me  great  pleasure  to  put  this  resolution.  All  those  in 
favor  of  the  resolution  will  say  aye — contrary,  no.  Carried 
unanimously. 

ADDRESS   OF   J.    P.    TOWNSEND 

Mr.  J.  p.  Townsend,  President  of  the  Bowery  Savings 
Bank,  New  York,  made  the  following  address: 

Savings  Banks  are  established  to  care  for  and  invest 
savings  of  those  who  have  no  knowledge  of  the  value  of 
securities  and  no  place  of  safety  for  their  funds  which 
may  be  returned  to  them  practically  on  demand,  with 
whatever  interest  can  be  earned  by  good  management  from 
investments  of  the  first  class.  This  system  tends  to  edu- 
cation in  good  citizenship,  and  it  is  worthy  of  remark  that 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      53 

no  efforts  to  aid  the  poor  ever  met  with  lasting  success 
unless  they  contemplated  some  form  of  education;  by  it 
the  wage-earner  learns  that  his  surplus,  no  matter  how 
small,  but  which  by  itself  could  earn  nothing,  can,  when 
added  to  that  of  others,  be  made  to  gain  a  fair  dividend. 
This  inculcates  habits  of  thrift  and  encourages  him  to  con- 
tinue to  save,  and  when  a  sufficient  sum  has  been  accumu- 
lated he  may  be  aided  by  a  mortgage  loan  to  buy  a  home 
for  himself,  or  he  may  use  his  savings  to  establish  himself 
in  business. 

For  the  purpose  of  this  discussion,  mankind  may  be 
divided  into  two  classes :  the  employer  and  the  employed. 
Formerly  the  first  were  supposed  to  possess  all  the  accu- 
mulated results  of  labor  left  over  after  providing  for  needed 
wants;  but  by  means  of  the  Savings  Banks,  the  latter  have 
become  capitalists,  and  they  belong  to  the  class  of  people 
that  can  be  considered  creditors.  Individually,  they  have 
no  credit,  except  for  weekly  supplies,  which  they  liquidate 
when  their  wages  or  salaries  are  paid ;  but  when  aggregated, 
the  four  million  and  a  half,  about,  of  depositors,  with  their 
$1,578,000,000  deposits  of  money  capital,  belong  to  the 
capital  class  who  loan  money  to  the  rich  on  bond  and 
mortgage,  invest  in  United  States  and  State  stocks  and 
bonds,  and  stocks  of  municipaUties;  they  loan  money  to 
erect  factories,  churches,  clubhouses,  commercial  buildings, 
dwellings,  etc.,  on  which  they  take  first  liens  after  the  tax 
gatherer.  If  a  local  improvement  is  projected,  if  docks  or 
schooUiouses  are  to  be  built,  or  streets  paved,  they  ad- 
vance money  to  the  municipalities  to  pay  for  them.  If 
their  government  (State  or  Federal)  negotiates  a  loan, 
Savings  Banks  are  among  the  largest  investors.  Theirs 
is  a  cooperative  union  of  the  industrial  classes.  Their 
capital  ministers  to  public  enterprises,  which  demand 
laborers  for  their  prosecution  and  completion,  which  thus 
returns  to  labor  in  the  form  of  wages  what  they  have  bor- 
rowed from  it  in  the  form  of  capital.  A  laborer  gets  better 
wages  on  account  of  the  facility  with  which,  through  Sav- 
ings Banks,  that  capital  has  been  procured,  which  is 


54  HISTORY  OF  THE  SAVINGS  BANKS 

equivalent  to  having  their  capital  returned  to  them  in  full 
in  the  form  of  wages,  while  at  the  same  time  they  hold 
in  their  pass-books  the  original  certificate  which  entitles 
them  to  have  it  again  returned  with  ordinary  dividends 
called  interest.  What  other  capitalist  is  able  to  make  so 
safe  and  at  the  same  time  so  profitable  an  investment  of 
his  money?  Trades  unions  are  formed  as  combinations 
of  labor  against  capital;  but  here  is  a  combination  of 
labor  and  capital.  The  former  seeks  to  control  the  price 
of  labor  by  arbitrary  dictation.  The  latter  advances  its 
price  by  the  operation  of  natural  laws.  The  former  as- 
sists the  employed  to  create  a  fund  which  offers  a  premium 
to  idleness  by  contributing  to  the  support  of  labor  while 
on  a  strike.  The  fund  of  the  latter  promotes  industry  by 
its  contributions  to  the  channels  of  enterprise  which  re- 
quire labor  for  their  prosecution. 

Because  Savings  Banks  hold  these  millions  of  money 
securely,  because  they  aid  those  w^ho  try  to  help  themselves, 
because  they  are  giving  assistance  to  thousands  of  men 
in  business,  or  owning  houses  partly  paid  for,  because  the 
system  has  been  perfected  by  experience  and  legislation, 
because  it  is  rooted  in  the  foundations  which  make  for  the 
material  and  moral  interests  of  the  people,  the  Savings 
Banks  system  deserves  the  support  and  demands  the 
sympathetic  attention  of  every  class  w^ho  are  interested 
in  promoting  the  public  welfare  and  of  doing  the  greatest 
good  to  the  greatest  number.  These  intentions  are  some- 
times interfered  with  if  people  quite  as  capable  as  trustees 
use  the  banks  solely  for  the  sake  of  obtaining  a  higher  rate 
of  interest  than  can  be  obtained  elsewhere,  and  who  usu- 
ally draw  their  larger  deposits  in  times  of  distress  and  panic 
for  the  purpose  of  buying  stocks  and  bonds  that  are  selling 
below  their  value.  Such  large  drafts  force  the  banks  to 
make  sacrifices  to  supply  this  extra  demand.  This  use  of 
the  banks  for  that  purpose  is  not  to  be  encouraged,  and 
that  the  only  way  to  discriminate  between  proper  and 
improper  persons  as  a  rule  is  to  refuse  large  deposits. 
Exceptions  should  of  course  be  made  in  the  case  of  life 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      55 

insurance  money  which  has  been  paid  to  a  widow,  or  the 
sudden  possession  of  a  legacy  or  fund  by  a  person  who 
handles  for  the  first  time  a  thousand  dollars  or  so  of  his 
own. 

Again,  on  account  of  the  higher  rate  of  interest  which 
Savings  Banks  pay  moneys  which  were  formerly  deposited 
in  trust  companies,  no  doubt  come  to  them,  and  solely  for 
that  reason  which  overburdens  the  Savings  Banks  with 
money  and  tends  to  reduce  their  income  for  the  reason 
that  they  are  obUged  to  purchase  securities  which  pay 
them  but  three  and  one  quarter  to  three  and  a  half  per 
cent,  on  the  money  invested. 

The  currency  question  may  not  be  a  burning  one  in  the 
minds  of  depositors,  but  many  of  them  think  of  it  and  often 
ask  questions  about  gold  if  they  want  it;  occasionally  one 
does  not  demand  it,  as  if  he  were  quite  anxious  to  take  it 
when  it  could  be  got  without  question.  It  therefore  be- 
hooves trustees  and  managers  to  be  as  explicit  and  aggres- 
sive in  announcing  their  views  to  conventions  and  as 
citizens  in  favor  of  a  single  gold  standard,  having  in  mind 
always  that  no  needless  anxiety  should  be  shown  which 
might  cause  a  demand  for  gold  that  it  is  impossible  to 
supply  and  which  cannot  be  lawfully  required;  but  having 
also  in  view  the  necessity  for  a  uniform  currency  that 
shall  always  be  the  equivalent  of  the  best  in  use  of  the 
commercial  world.  A  contraction  of  the  currency  which 
would  ensue  if  the  owners  of  silver  buUion  were  allowed  to 
take  fifty-one  cents  of  it  to  the  mint  and  have  it  coined 
into  standard  legal  tender  dollars  at  a  valuation  of  one  hun- 
dred cents  would  cause  such  contraction  to  the  extent  of 
$620,000,000  by  putting  a  premium  on  the  gold  now  in  the 
hands  of  banks  and  the  people. 

The  argument  that  we  do  not  use  gold  in  our  daily 
transaction  is  fallacious  when  it  is  well  known  that  the 
currency  we  use  has  a  basis  of  gold,  which  metal  can  now 
be  had  when  it  is  required. 

The  deposits  in  Savings  Banks  are  believed  by  deposi- 
tors to  be  secure  because  of  the  credit  and  faith  reposed  in 


56  HISTORY  OF  THE  SAVINGS  BANKS 

them;  but  if  this  credit  is  shaken  by  a  free  coinage  law 
these  deposits  would  be  overdrawn  to  a  great  extent  before 
the  premium  on  gold  had  advanced  very  largely. 

It  is  a  good  idea  to  print  a  monthly  statement  for  dis- 
tribution among  depositors  of  all  investments  of  the  bank, 
which  may  be  done  by  placing  them  in  the  racks  marked 
''Take  one,"  which  we  find  is  complied  with  to  a  very  great 
extent.  All  depositors  may  not  do  it,  but  the  inquiring 
one  always  does,  the  one  who  "wants  to  know,  you  know," 
and  who  would  ask  questions  if  he  were  not  forestalled,  a 
number  of  these  inquirers  tends  to  increase,  and  many 
show  the  statement  to  friends  and  boast  of  the  good  quali- 
ties of  "my  bank."  It  is  surprising  how  their  interest 
is  increased  when  pains  are  taken  to  excite  it,  and  what 
good  missionaries  they  become  in  inducing  others  to  open 
bank  accounts. 

Another  suggestion:  The  uses  and  benefits  of  Savings 
Banks  might  be  made  known  also  by  the  circulation  of 
leaflets.  I  venture  to  give  you  a  sample  of  two  or  three, 
viz. :  An  abstract  of  a  curious  account  showing  unexpect- 
edly good  results  on  a  long-forgotten  balance. 

In  1835  an  account  was  opened  in  this  bank  by  a  de- 
posit of  $5,  further  deposits  were  made  up  to  April,  1849, 
when  the  total  amount  was  $705.  At  various  other  times 
between  1835  and  1850,  $253.89  was  withdrawn  leaving 
a  balance  {with  accumulated  dividends  of  $47.89)  of 
$499.  From  1853  to  1855,  $500  was  withdrawn,  but  when 
the  last  draft  was  made  the  depositor  appeared  to  be 
overdrawn  to  the  extent  of  $1,  which  may  have  caused 
him  to  lose  his  regard  for  the  account,  but  he  had  over- 
looked the  fact  that  there  was  due  him  at  that  time  divi- 
dend amounting  to  $100.01  which  had  not  been  entered  in 
his  pass-book,  and  the  bank  really  owed  him  a  net  balance 
of  $99.01. 

This  balance  went  on  accumulating  dividends  for  twenty 
years  until  1875,  when  it  became  a  dormant  account  and 
ceased  to  draw  interest,  the  amount  then  due  him  was 
$343.25.     Efforts  were  made  from  time  to  time  to  dis- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK     57 

cover  the  owner  of  the  account  but  without  success  until 
1889,  when  he  was  found  a  ver}^  old  man  unable  to  work 
and  living  on  the  bounty  of  his  children,  totally  unaware  of 
the  snug  sum  due  him  by  the  bank.  This  balance  of 
$343.25  was  paid  to  him  in  November  of  that  year  to  his 
great  delight  and  satisfaction.  An  abstract  of  an  account 
now  open  showing  remarkable  results : 

In  1866  a  depositor  opened  an  account  and  made  de- 
posits from  time  to  time  up  to  1879  which  amounted  in  all 
to  $1,550;  at  various  other  times,  from  1875  to  1894, 
$1,358.06  was  withdrawn,  showing  that  the  depositor 
had  taken  out  all  the  money  he  had  deposited  except 
$191.94;  stiU  on  the  ist  of  July,  1894,  the  dividends  which 
the  deposits  had  earned  $2,808.06,  and  the  amount  due 
by  the  bank  on  that  date  was  the  handsome  sum  of  $3,000, 
which  will  continue  to  earn  further  dividends  if  it  remains 
in  the  bank. 

An  abstract  of  an  account  showing  the  profits  and 
deposits  which  had  remained  in  the  bank  less  than  seven- 
teen years: 

In  March,  1878,  an  account  was  opened  in  this  bank  by 
deposits  amounting  to  $500.  On  the  ist  of  January, 
1895,  they  had  earned  dividends  amounting  to  $495.92,  so 
that  the  bank  at  that  time  and  now  owes  the  depositor 
$995.92,  showing  that  the  amount  due  the  depositor  had 
nearly  doubled  in  seventeen  years. 

The  income  on  bonds  and  stocks  we  are  permitted  to 
buy  tends  to  decrease,  the  credit  of  the  various  common- 
wealths is  so  high  and  the  amount  of  their  indebtedness  so 
limited  that  new  investments  in  them  are  almost  nil.  The 
amount  of  investment  in  bonds  and  mortgages  is  limited 
by  law  and  we  are  obliged  to  buy  municipal  obligations. 
Those  of  twenty-eight  provincial  cities  have  been  added 
to  our  list  in  recent  years  by  action  of  the  Legislature;  this 
fact  is  well  known  to  dealers  in  this  kind  of  securities  who 
make  so  much  money  out  of  Savings  Banks  that  their 
number  has  increased.  They  bid  for  and  obtain  most  of 
the  loans  offered,  and  thus  taking  advantage  of  our  en- 


58  HISTORY  OF  THE  SAVINGS  BANKS 

larged  field  by  holding  and  selling  them  for  a  profit  which 
reduces  the  returns  to  us  when  we  buy.  If  you  look  over 
the  list  you  will  find  that  the  net  interest  we  can  receive 
on  the  best  of  these  is  from  three  and  a  quarter  to  three 
and  a  half  per  cent.,  but  if  you  look  at  another  list  con- 
taining the  names  of  prohibited  towns  you  will  find  a 
difference  in  favor  of  their  purchase  of  from  one  quarter 
to  one  half  per  cent,  on  the  returns.  The  higher  price 
which  we  are  obliged  to  pay  is  in  part  our  own  fault ;  but 
it  would  seem  that  we  are  in  a  position  to  remedy  it  in  a 
measure. 

Let  me  venture  this  statement :  Investments  in  munici- 
pal securities  made  by  Savings  Banks  of  the  State  of 
New  York  should  pay  at  least  say  three  and  a  half  per 
cent.  Suppose  we  decided  on  this  figure  and  when  new 
loans  are  advertised  by  municipalities  let  us  make  our  bids 
either  through  our  own  Executive  Committee  and  through 
'some  intelligent  and  responsible  banking  house  recom- 
mended by  it  who  would  act  for  us  for  one  eighth  per  cent, 
commission  on  the  par  of  bonds  and  authorize  them  after 
sending  us  all  the  particulars  of  the  proposed  loan  to  bid 
for  each  of  the  banks  that  cared  to  invest  in  them.  This 
committee  or  firm  would  then  make  bids  at  one  price,  nam- 
ing his  principal  which  would  reduce  the  number  of  Sav- 
ings Banks  applicants  by  126.  This  arrangement  would 
speedily  be  known;  and  when  it  was  understood  that  the 
Savings  Banks  of  the  State  of  New  York  had  no  intention 
of  competing  with  each  other,  it  would  doubtless  have  the 
effect  of  increasing  our  income. 


THE  ADVANTAGES  TO  SAVINGS  BANKS  OF  CONCERTED  ACTION 
IN  THE  PURCHASE  OF  MUNICIPAL  BONDS 

Mr.  Andrew  Mills  addressed  the  Convention  as  follows: 

In  presenting  my  views  on  this  subject  to  my  fellow- 
officers  for  their  consideration,  it  is  with  the  firm  convic- 
tion of  its  increasing  importance,  and  the  belief  that  if  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      59 

remedy  suggested  is  carried  out  great  benefit  will  accrue 
to  the  banks. 

As  the  case  now  stands,  we  are  forced  to  pay  large  prof- 
its to,  in  many  cases,  irresponsible  dealers  who  act  simply 
as  middlemen  where  no  middlemen  are  needed.  In  other 
words,  the  dealers  are  making  a  large  amount  of  money 
each  year  out  of  the  banks  by  forcing  them — the  banks — 
to  pay  just  so  much  more  for  their  investments  than  they 
otherwise  would. 

In  order  to  bring  this  matter  clearly  before  us,  let  us 
suppose  a  case.  A  city  advertises  for  bids  for  $2,000,000 
bonds.  Notice  of  the  fact  is  sent  far  and  wide,  as  it  should 
be.  The  dealers  immediately  get  together,  form  a  syndi- 
cate, agree  upon  a  price,  and  put  in  a  bid  for  the  "whole  or 
none."  The  Savings  Banks,  on  the  other  hand,  each  for 
itself,  bid  for  such  portion  of  the  issue  as  they  may  want,  at 
such  a  price  as  in  the  opinion  of  its  officers  will  yield  a  fair 
return  on  the  investment. 

The  bids  are  opened,  and  in  the  great  majority  of  cases 
the  bonds  are  awarded  to  the  syndicate,  who  immediately 
fix  a  price  from  one  half  per  cent,  to  two  and  one  half  per 
cent,  in  advance  of  that  paid,  and  kindly  allow  the  banks 
to  buy  at  the  increased  price,  thereby  pocketing  a  hand- 
some profit  for  simply  preventing  the  banks  from  getting 
the  investment  on  fair  terms. 

Another  way  of  accomplishing  the  same  object  is  as 
follows:  A  city  or  county  advertises  to  sell  certain  bonds 
at  public  auction.  The  bond  dealers  are  on  hand  bright 
and  early,  form  a  "pool,"  so-called,  fix  a  price,  and  one  of 
their  number  bids  for  the  pool.  In  many  cases  this  price 
is  higher  than  the  officers  of  the  local  banks  desire  to 
pay,  and  the  dealer  gets  the  bonds.  If  the  issue  is  a  large 
one,  the  bonds  are  divided  pro  rata;  on  the  other  hand,  if 
it  is  a  small  amount,  the  bonds  are  auctioned  off  to  the 
member  of  the  pool  making  the  highest  bid,  and  the  profits 
over  the  price  paid  the  city  are  proportionately  divided. 
The  bonds  are  eventually  disposed  of  to  the  same  Savings 
Bank  in  another  locaHty  at  a  still  further  advance  in  price. 


6o  HISTORY  OF  THE  SAVINGS  BANKS 

If  it  so  happens  that  the  bonds  cannot  be  marketed  at 
once,  there  are  plenty  of  institutions,  and  among  them 
Savings  Banks,  who  will  loan  the  funds  necessary  to  carry 
them,  thus  supplying  the  capital  which  the  dealer  may 
lack. 

By  this  system  you  can  readily  see  how  easy  it  is  to 
make  money  with  comparatively  no  risk,  and  how  great 
the  inducement  for  concerns  with  little  or  no  capital  to  go 
in  the  business. 

As  a  matter  of  fact,  within  the  last  five  years  the  num- 
ber of  these  dealers  has  increased  fivefold.  That  there 
is  a  legitimate  province  for  the  bond  dealer  or  broker  goes 
without  saying,  but  it  is  not  to  antagonize  the  interests  of 
Savings  Banks,  as  many  of  them  are  now  doing. 

Such  is  the  evil;  what  is  the  remedy?  My  answer  is 
concerted  action  on  the  part  of  the  Savings  Banks. 

I  am  firmly  convinced  that  those  banks  desirous  of  bid- 
ding on  any  proposed  issue  should  consult  with  each  other 
beforehand,  and  arrive  at  a  price  to  be  paid,  fair  alike  to 
seller  and  buyer,  and  whether  successful  in  their  bid  or 
not,  let  that  be  their  price  for  those  bonds.  In  making 
their  bid  for  bonds,  the  brokers  are  not  governed  so  much 
by  demand  and  supply  as  they  are  by  the  price  paid  for 
the  last  similar  issue,  almost  invariably  advancing  the 
figure  slightly  so  as  to  be  more  certain  of  success. 

In  conversation  with  a  number  of  dealers,  I  have  re- 
monstrated with  them  for  continually  advancing  prices 
and  invariably  received  the  reply:  "The  banks  buy  the 
bonds  eventually  at  the  advanced  price."  Suppose  the 
banks  did  not  buy  at  the  advanced  price,  what  then? 

I  would  not  for  a  moment  be  understood  as  advocating 
a  combination  for  the  purpose  of  forcing  prices  to  an  un- 
natural level,  but  simply  concerted  action  on  the  part  of 
the  banks  to  obtain  a  fair  return  on  their  investments, 
thus  enabling  them  in  turn  to  pay  their  depositors  a  fair 
interest. 

The  remedy  is  in  our  hands.  As  I  have  said,  we  are  the 
market,  and  if  we  simply  put  aside  all  feeling  of  rivalry 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      6i 

and  act  in  concert,  the  cure  of  the  evil  will  not  be  long 
delayed.  We  represent  more  than  1,600,000  depositors, 
fully  one  quarter  of  the  population  of  this  State,  and  it  is 
our  duty  to  study  their  interests  above  all  else,  and,  in  my 
judgment,  by  concerted  action  in  the  purchase  of  munici- 
pal bonds  the  banks  would  save  large  amounts  of  money 
each  year.     Is  it  not  our  duty  so  to  do? 

MAXIMUM    ACCOUNTS 

On  the  sub  ject  of  maximum  accounts,  Mr.  C.  E.  Sprague 
said: 

I  wish  to  say  that  I  think  our  present  limitation  of 
$3,000  as  the  maximum  that  a  man  can  have  in  a  Savings 
Bank  is  all  wrong;  not  that  I  do  not  want  a  limitation, 
that  I  do  not  want  a  discrimination,  but  it  is  based  on  the 
wrong  principle.  What  distinguishes  a  Savings  Bank 
depositor  and  a  capitalist  who  wants  temporarily  to  use 
the  facilities  of  a  Savings  Bank  for  purposes  which  he 
ought  to  accomplish  otherwise  is  the  gradual  nature  of  the 
deposits.  If  a  man  deposits  $10  a  week,  he  is  a  Savings 
Bank  depositor,  I  take  that  merely  as  an  illustration,  a 
reasonable  sum  that  he  is  gradually  depositing,  then  he  is 
the  kind  of  man  who  is  saving  and  accumulating.  But  to 
say  that  if  two  persons  come  and  offer,  one  of  them  $2,990 
and  the  other  $3,010  all  in  a  lump,  that  one  of  these  men, 
the  $2,990  man,  is  a  genuine  Savings  Bank  depositor,  and 
the  $3,010  man  is  a  capitalist,  seems  to  me  absolute  non- 
sense. This  limit  ought  not  to  be  a  limit  of  maximum,  but 
ought  to  be  a  limit  of  time.  There  is  a  rule  in  the  Savings 
Banks  of  Maryland,  I  think,  limiting  the  amount  that  can 
be  put  in  during  a  given  period.  A  man  from  a  Utah  bank 
told  me  their  limitation  was  not  more  than  $50  in  any 
month  from  any  man;  but  when  he  gets  $3,000  they  do 
not  say  to  him:  ''You  are  now  capable,  by  having  $3,000, 
of  investing  this  money  yourself,  you  have  acquired  finan- 
cial wisdom,  and  we  will  take  no  more."  He  can  go  on 
until  he  has  $10,000.     Perhaps  he  is  a  common  laborer 


62  HISTORY  OF  THE  SAVINGS  BANKS 

who  can  spare  $io  a  week.  When  he  has  reached  $3,000 
he  is  no  more  able  to  invest  it  in  real  estate  or  in  bonds  than 
when  he  began,  and  they  let  him  go  on.  It  is  a  time  limit, 
and  not  an  absolute  limit.  But  that  a  man  can  come  in 
and  call  himself  a  Savings  Bank  depositor  when  he  hands 
out  three  $1,000  bills  is  absurd.  But  we  take  it  because 
we  cannot  bother  to  inquire  into  the  motives.  The  rule 
is  $3,000  and  we  will  take  $3,000.  I  do  not  want  to  have 
the  limit  any  lower,  I  do  not  want  to  have  it  any  higher, 
but  I  want  to  have  it  a  limit  as  to  time.  Let  the  law  say 
that  he  can  put  in  $50  a  month.  Let  the  law  say  another 
thing,  and  this  would  be  a  great  makeweight  against  rapid 
withdrawals  such  as  we  had  in  1893;  if  a  man  has  been 
depositing  for  a  number  of  years  $50  a  month  and  gets 
together  $3,000  or  $4,000,  and  if  in  a  flurry  like  that  of 
1893,  because  he  can  buy  stocks  cheap  or  for  some  other 
reason,  he  draws  out  $2,000  as  quick  as  he  can,  and  he 
spends  it  in  some  way,  when  he  returns  he  has  to  begin  over 
again,  he  has  got  to  give  to  the  bank  a  deposit  of  $50  a 
month  and  gradually  work  up;  and  then  he  will  say:  "I 
am  not  going  to  run  the  chance  of  letting  this  lay  idle,  I 
will  not  take  it  out,  this  is  earning  good  interest."  I  think 
under  such  rules  we  would  find  withdrawals  very  much  less 
capricious  than  now,  and  the  question  of  large  depositors 
would  be  largely  obviated,  and  it  would  be  more  equitable 
than  now.  I  have  tried  the  double  rate,  and  we  do  not 
like  it.  We  prefer  to  pay  one  rate  to  all,  because  the 
tendency  is  to  split  the  account.  We  have  an  enormous 
number  of  accounts  of  $1,000,  and  they  draw  $20  every 
six  months. 


CHAPTER  IV 

Fourth  Annual  Convention — Perils  of  Repudiation  and  Inflation 
Escaped — Danger  in  too  Rapid  Increase  of  Municipal  Debts — 
Bonds  Authorized  for  Greater  New  York — The  Taxation  of 
Savings  Bank  Deposits— Notable  Addresses  by  Superintend- 
ent Kilbum,  ex- Comptroller  of  the  Currency  Wm.  L.  Tren- 
holm,  and  Hon.  Edward  Atkinson,  of  Boston. 

THE  Fourth  Annual  Convention  of  the  Association 
was  held  on  Thursday,  May  20,  1897,  with  sixty- 
five  banks  represented. 
President  John  Harsen  Rhoades  made  a  notable  address 
on  this  occasion,  which  is  given  in  full  herewith : 

ADDRESS    or  PRESIDENT   JOHN  HARSEN  RHOADES 

Gentlemen :  In  giving  you  welcome  to  this,  the  fourth 
anniversary  of  tliis  Association,  I  feel  that  I  can  congratu- 
late you,  and  through  you  the  depositors  in  the  banks,  that 
the  country  has,  for  the  time  being,  escaped  the  peril  of 
repudiation  and  the  losses  that  repudiation  would  bring  to 
the  working  classes  in  this  State  and  throughout  the  entire 
country.  Never  since  Savings  Banks  were  established, 
and,  indeed,  never  since  the  Republic  was  founded,  have 
such  grave  disasters  been  threatened  to  the  material  in- 
dustries of  the  country  as  were  threatened  during  the 
year  which  has  just  closed.  In  the  past  pestilence  has 
brought  its  fears  and  its  sorrows,  both  to  pass  away  speed- 
ily— its  ravages  prevented  and  its  liability  to  recurrence 
lessened  through  the  enforcement  of  hygienic  law.  In  the 
past  war  has  brought  its  blight  and  its  horrors,  but  through 
its  influence  and  by  its  dread  power  it  has  purified  the 
people,  ennobled  the  race,  and  hammered  the  loose  ele- 

63 


64  HISTORY  OF  THE  SAVINGS  BANKS 

ments  of  federation  into  a  solid,  strong,  and  great  nation. 
But  the  seeds  of  repudiation,  once  fairly  fastened  upon  the 
body  politic,  can  have  no  other  end  than  the  sapping  of 
the  vitality  of  the  people,  the  destruction  of  their  honor, 
the  rottening  of  every  column  upon  which  the  fair  struc- 
ture of  our  liberty  is  built,  and  the  ultimate  destruction  of 
the  Republic  itself. 

No  wonder,  then,  that  those  to  whom  is  entrusted  the 
care  of  eight  hundred  millions  of  the  money  of  the  thrifty 
working  classes  stood  appalled  before  the  disaster  which 
threatened  so  grave  and  threw  into  the  contest  all  the 
influence  they  possessed  to  help  avert  the  blow.  Even 
to-day  the  clouds  are  threatening  and  the  danger  is  not 
past,  nor  will  it  pass  until  those  who  hold  the  reins  of 
government  have  remodeled  the  whole  monetary  and 
banking  system  of  this  country  and  placed  a  law  upon  the 
statute  books  which  will  make  the  currency  of  the  country 
equal  to  the  best  in  the  world  and  exchangeable  at  all  times 
on  a  parity  with  the  best  in  the  world. 

We  hear  much  in  these  latter  days  about  trusting  in 
Providence  and  that  He,  who  is  the  Divine  Ruler  of  all 
nations,  will  take  and  keep  this  great  Republic  from  ulti- 
mate harm  and  loss.  I  have  a  profound  faith  in  the  Deity 
who  rules  the  universe,  but  I  have  also  a  profound  faith 
in  the  great  natural  laws  which  He  has  created  for  the 
government  of  the  world,  and  I  do  not  believe  that  He 
will  change  these  great  natural  laws  to  please  His  people. 
If  we,  as  a  nation,  are  determined  to  violate  His  laws,  and 
allow  corruption  and  greed  and  selfishness  to  rule  in  our 
Legislatures  and  at  the  seat  of  our  Government;  if  we 
break  the  great  moral  law:  "Thou  shalt  not  steal,"  and 
disobey  all  the  laws  of  good  government  which  the  experi- 
ences of  civilization  have  shown  to  be  the  best  for  the 
development  of  a  people;  if  honor  and  honesty  are  to  be 
replaced  with  dishonor  and  dishonesty — then  we  must 
suffer  the  consequences,  and  this  country  will  be  dragged 
through  the  very  depth  of  disaster — even  to  the  border- 
line of  revolution — until,  by  bitter  experience,   it  has 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      65 

learned  that  the  great  moral  laws  of  the  universe  cannot 
be  disobeyed  without  that  punishment  which  will  fall 
alike  upon  the  innocent  and  the  guilty. 

But,  gentlemen,  you  and  I  saw,  during  the  anxious 
months  which  preceded  the  election  of  1896,  a  faith  and  a 
constancy  on  the  part  of  the  working  classes,  who  largely 
make  up  our  depositors,  that  we  could  not  but  admire 
and  strive  to  imitate.  Honest  themselves,  they  would 
not  believe  that  the  majority  of  the  people  in  this  country 
were  dishonest,  and  so  they  rightly  retained  confidence 
in  our  banks,  refused  to  withdraw  their  deposits,  and  stood 
loyally  by  the  institutions  who  had  been  and  were  striving 
to  protect  them. 

Truly,  and  with  a  wisdom  far  reaching  into  the  minds  of 
the  people,  did  the  immortal  Lincoln  frame  that  rude  and 
homely  phrase,  "You  cannot  fool  all  the  people  all  the 
time,"  and  so  to-day,  as  we  stand  here,  striving  to  search 
the  future  which  still  looks  so  dark,  I  bid  you  to  trust  the 
people  and  to  have  faith  that  they  will  find  the  way  to  lead 
the  nation  forward  and  onward  to  brighter  days  of  pros- 
perity, with  foundations  strengthened  and  laws  in  force 
and  being  enacted  upon  which  we  shall  rise  purified  as  a 
nation  into  a  nobler  life  and  a  more  beneficent  existence. 

Your  Executive  Committee,  in  its  annual  report,  will 
give  you  the  details  of  the  work  done  by  this  Organization 
during  the  past  year,  and  refer  to  such  subjects  as  they 
deem  of  interest  to  you  and  the  depositors  in  our  banks. 

Much  has  been  and  is  being  said  throughout  the  coun- 
try about  Postal  Savings  Banks, 

A  short  time  ago  I  had  the  honor  of  attending  the  Mone- 
tary Convention  at  Indianapolis  and  of  presenting  to  that 
Convention  the  needs  of  a  change  in  our  currency  and 
banking  laws  and  the  importance  of  the  maintenance  of 
the  Gold  Standard,  as  viewed  from  the  standpoint  of  the 
Savings  Banks  of  this  State.  In  doing  so,  I  explained 
fully  the  nature  of  the  Savings  Banks  laws  existing  in  this 
and  the  Eastern  States,  and  told  of  the  large  sums  here 
deposited  in  the  banks,  urging  that  the  Savings  Bank  law 


66  HISTORY  OF  THE  SAVINGS  BANKS 

in  operation  in  the  State  of  New  York  should  be  extended 
in  all  the  larger  cities  in  each  State  in  the  Union,  or  let  it 
be  remembered  that  the  large  proportion  of  the  so-called 
Savings  Banks  of  the  West  are  not  eleemosynary  in  their 
character,  but  simply  adjuncts  to  private  banking  houses, 
generally  governed  by  limited  State  laws  as  to  the  class  of 
investments  allowed  for  such  deposits,  and  nothing  more. 

It  was  gratifying  to  find  that  the  explanation  given, 
while  creating  surprise,  at  the  same  time  created  much 
interest  on  the  part  of  those  who  heard  what  I  had  to  say, 
and,  to  a  certain  extent,  that  interest  has  found  outward 
expression  in  the  press  of  the  country  in  certain  sections. 
This  knowledge  has  led  me  to  know  how  widely  the  subject 
of  Postal  Savings  Banks  has  been  and  is  being  discussed 
through  the  West  and  South. 

Now  we  know  that  the  Savings  Bank  officers  of  this  and 
the  Eastern  States  have  no  prejudice  against  and  no  dis- 
like per  se  to  a  Postal  Savings  Bank  system  conducted  by 
the  Government,  and,  realizing  as  we  do  that  our  work  is 
charitable  in  its  nature,  we  would  gladly  welcome  any  and 
all  systems,  wisely  founded,  which  would  lead  to  an  increase 
of  thrift  on  the  part  of  the  people;  but  in  all  of  the  edi- 
torials I  have  read  (and  I  have  read  many),  and  in  all  the 
arguments  made  in  favor  of  the  Postal  Savings  Bank 
System  which  I  have  seen,  I  have  never  found  one  that 
has  intelligently  and  satisfactorily  answered  this  question: 
"What  will  the  Government  do  with,  and  how  will  they 
invest  and  keep  safely  invested,  the  millions  of  dollars 
which  must  come  into  their  hands  through  a  Postal  Sav- 
ings Bank  Law?  " 

The  existing  debt  of  the  United  States  has  already  been 
absorbed  by  the  people,  and  is  not  available  for  invest- 
ment purposes  on  the  part  of  the  Government. 

The  intention  and  the  will  of  the  people  is  undoubtedly 
to  gradually  reduce  its  Government  debt;  therefore,  "bar- 
ring a  war,"  there  is  no  probability  of  a  large  increase  or 
the  permanent  maintenance  of  a  Government  debt  on  the 
part  of  the  United  States. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      67 

The  experience  of  the  Freedman's  Savings  Bank  in 
Washington,  which  was  supposed  to  be  in  part  under 
Government  control,  and  which  failed  miserably  with 
great  loss  to  the  poor  blacks  who  entrusted  their  savings 
to  its  care,  is  one  evidence  of  danger  in  connection  with 
giving  the  Government  control  of  the  Postal  Savings  Bank 
system. 

The  tendency  to  spend  the  moneys  so  received,  which 
in  time  would  run  up  into  the  hundreds  of  millions  of  dol- 
lars, would  lead  to  gross  extravagance  on  the  part  of  Con- 
gress. 

Under  our  form  of  Government,  notwithstanding  the 
success  which  has  attended  the  introduction  of  such  a 
system  in  England  and  elsewhere  on  the  continent  of 
Europe,  it  does  seem  to  me  that  the  dangers  are  very  great, 
and  that  the  question,  "How  shall  the  Government  invest 
these  moneys  so  received?"  still  remains  unanswered,  and 
is  practically,  at  the  present  time,  unanswerable. 

A  few  weeks  ago  Postmaster-General  Gary  spoke  as 
follows :  * '  And  I  hope  to  be  able  to  get  legislation  through 
Congress  to  that  effect.  Such  banks  might  be  founded  in 
connection  with  a  two  per  cent,  bond  issued  by  the  Govern- 
ment, and  might  result  in  these  bonds  being  held  by  the 
people  in  every  part  of  the  country.  They  would  give  a 
foundation  for  the  establishing  of  national  banks  every- 
where, and  they  would  bind  our  people  together.  Every 
man  that  held  a  bond  would  be  a  patriot.  There  would 
be  no  more  borrowing  money  from  England,  and  there 
would  be  millions  who  would  save  who  are  not  saving  now. 
I  don't  believe  in  the  fear  many  people  have  of  a  national 
debt,  and  I  think  in  many  respects  General  Butler  was 
right  when  he  said  that  'a  public  debt  was  a  national 
blessing.'" 

It  can  be  readily  seen  that  the  system  suggested  by  the 
honorable  gentleman  is  entirely  at  variance  with  the 
Postal  Savings  Bank  system  of  England  and  elsewhere, 
and,  as  stated  by  him,  needs  elaboration  to  be  fully  under- 
stood. 


68  HISTORY  OF  THE  SAVINGS  BANKS 

What  does  he  mean  by  Postal  Savings  Banks  being 
established,  when  the  Government  is  the  bank,  and  how 
would  these  bonds  be  held  by  the  people  in  every  part  of 
the  country,  and  how  would  the  Postal  Savings  Banks  aid 
in  giving  a  foundation  for  the  establishment  of  national 
banks  everywhere? 

It  was  well  said  in  one  editorial  which  came  under  my 
observation  that,  "What  can  be  done  under  a  monarchi- 
cal system,  successfully,  cannot  always  be  done  success- 
fully under  a  republican  form  of  government";  and  it 
must  not  be  forgotten  that  the  population  of  England  and 
France  is  crowded  within  a  narrow  area,  has  long  been  ac- 
customed to  the  control  of  a  strong  centralized  govern- 
ment, which,  experience  has  proven,  through  all  and  every 
change  of  party  control  has  remained  steadfast  in  its 
determination  to  protect  its  credit  and  honorably  dis- 
charge its  obligations;  and  this  has  engendered  confi- 
dence on  the  part  of  the  people  and  led  to  free  deposits 
of  savings. 

Viewed  in  the  light  of  recent  events,  it  is  evident  that 
the  time  has  not  yet  come  when  in  this  country  the  Gov- 
ernment should  assume  the  responsibility  of  caring  for  the 
savings  of  the  laboring  classes.  That  the  time  wUl  come, 
I  have  no  doubt,  when  such  a  system,  so  pregnant  with 
good  to  the  welfare  of  the  people,  may  be  safely  inaugu- 
rated and  successfully  conducted ;  and  when  that  time  ar- 
rives no  class  in  the  community  will  welcome  such  a  system 
more  heartily  than  those  who  are  in  charge  of  the  great 
Savings  Bank  depositories  of  the  Eastern  and  Middle 
States. 

I  have  on  previous  occasions,  and  I  again  call  to  your 
serious  attention  the  fact  that  our  Savings  Banks  are 
carrying  a  very  large  percentage  of  the  municipal  debt 
within  the  State,  in  fact  over  eighty  per  cent,  of  such  debt 
is  held  by  our  banks,  and,  in  some  instances,  the  entire 
debt  of  the  smaller  towns  and  villages  is  so  held. 

It  should  not  be  forgotten  that  at  no  distant  date  the 
volume  of  Government  and  State  obligations  will  be  largely 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      69 

reduced;  that  in  periods  of  financial  depression  and  panic 
there  are  no  buyers  for  the  bonds  of  the  smaller  municipali- 
ties, except  the  banks  themselves;  and  that  the  time  must 
come  when,  unless  through  increased  holdings  of  securities 
which  have  wide  and  ready  sale,  the  bank  will  be  com- 
pelled to  carry  a  much  larger  percentage  of  their  deposits 
in  cash  or  its  full  equivalent. 

This  is  a  debt-making  era  so  far  as  our  municipalities 
are  concerned.  The  banks  in  this  State  are  carrying  one 
hundred  and  sixty-four  millions  of  the  municipal  debt  of 
its  cities,  towns,  counties,  and  villages.  Forty  per  cent, 
of  the  debt  of  the  City  of  New  York,  sixty-five  per  cent, 
of  Brooklyn,  seventy  per  cent,  of  Long  Island  City,  and 
ninety  per  cent,  of  Kings  County  is  so  held,  and  it  is  full 
time  that  we  are  aroused  to  existing  tendencies  when  we  see 
the  authorities  of  a  great  city  like  Brooklyn  calmly  con- 
senting to  the  creation  of  four  millions  of  indebtedness 
on  the  part  of  the  county  officials,  which  county  was 
embraced  within  the  city  of  Brooklyn;  such  increase  of 
indebtedness  being  created  within  fifteen  days  of  the  ter- 
mination of  the  legal  existence  of  the  county,  so  far  as  its 
debt-making  power  was  concerned. 

To-day  the  smaller  villages  and  towns  now  to  be  ab- 
sorbed in  the  Greater  New  York  are  rushing  to  create  new 
and  large  indebtedness,  in  amount  sufficient  to  ruin  them 
as  they  exist  at  the  present  time,  in  order  that  public  im- 
provements far  beyond  the  existing  needs  of  a  small  popu- 
lation can  be  carried  out  and  the  debt  assumed  by  the 
city  into  which  they  are  to  be  merged;  and  these  bonds 
are  being  taken  in  the  hope  and  expectation  of  reaping 
large  profits  in  selling  them  to  the  Savings  Banks  under  the 
delusion  that  such  bonds  will  be  assumed  by  the  Greater 
New  York  under  its  new  charter,  while  the  Legislature, 
in  the  face  of  the  bill  to  create  a  Greater  New  York,  did 
not  hesitate  to  authorize  millions  of  dollars  of  expenditures 
in  the  general  grab  made  by  all  the  municipalities  con- 
cerned to  increase  their  debts  before  the  consolidation 
took  place. 


70  HISTORY  OF  THE  SAVINGS  BANKS 

If  such  acts  as  these  are  not  morally  dishonest,  they 
tread  closely  upon  the  heels  of  dishonesty,  and  it  is  a 
marvel  to  my  mind  how  the  authorities  of  these  cities  will 
permit  these  things  to  take  place  before  their  eyes  without 
an  injunction  restraining  such  acts;  and  they  certainly 
will  be  neglectful  of  their  duty  to  the  public  and  the  tax- 
payers if  the  legality  of  the  volume  of  the  debt  so  created 
is  not  tested  by  the  highest  courts  before  being  assumed  in 
the  general  equalization  of  debt. 

In  order  that  the  extent  of  these  proposed  and  actual 
increases  in  the  debt  of  cities  and  towns  embraced  under 
the  charter  of  the  Greater  New  York  may  be  thoroughly 
understood,  I  append  the  following  list  of  such  increase 
or  proposed  increase  of  debt,  and  this  is  but  a  beginning: 

BONDS  SOLD  SINCE  JANUARY  i,  1897 

85,000 — Far  Rockaway,  L.  I.       ...'..  5s,  Jan.  25 

120,000 — Flushing,  L.  1 4s,  Jan.  28 

618,000 — Queens  County 4s,  Mar.  29 

45,000 — Arverne-by-the-Sea,  L.  1 5s,  Apl.    5 

150,000 — Jamaica,  L.  1 4s,  Apl.    7 

200,000 — Jamaica,  L.  1 4s,  Apl.  12 

450,000 — Jamaica,  L.  1 4s,  Apl.  20 

202,000 — Richmond  County           4s,  Apl.  14 

53,000 — Newtown,  L.  1 4s,  Apl.  20 

620,000 — Newtown,  L.  1 4^s,  Apl.  28 

29,500 — Long  Island  City 4^s,  Apl.  26 

80,000 — Brooklyn 3^5,  Apl.  26 

70,000 — Richmond  Hill,  L.  1 4s,  May    i 

2,722,500 

BONDS  ADVERTISED  FOR  SALE 

15,000 — Corona,  L.  I.  4s,     May  14 

400,000 — Brooklyn 3^5,  May  18 

BONDS  AUTHORIZED  FOR  GREATER  NEW  YORK 

NEW   YORK 

For  a  garden  at  Van  Cortlandt  Park      ....  $        50,000 

To  establish  a  zoological  garden  at  Bronx  Park    .  125,000 

For  the  repair  of  streets  and  avenues     ....  2,000,000 

Providing  for  a  public  library  in  Bryant  Park.      .  2,500,000 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      71 

For  an  addition  to  the  American  Museum  of  Natural 

History  buildings  and  its  equipment  ...     $      500,000 

For  a  new  Tombs  Prison 500,000 

Providing  for  four  new  high  schools 2,500,000 

For  additional  pumping  stations  and  water  mains.  500,000 

Providing  for  general  park  improvements     .      .      .  250,000 
For  the  erection  of  new  common  schools  and  their 

equipment 10,000,000 

Providing  for  a  drawbridge  at  Third  Ave.  over  the 

Harlem  River         500,000 

Jerome  Avenue  improvements 200,000 

For  a  bridge  over  the  Bronx,  between  Williams- 
bridge  and  Woodlawn  stations         150,000 

Providing  for  a  bridge  over  the  Bronx  at  E.  177th  St.  .  75,ooo 
For  the  improvement  of  the  Spujlen  Duy\^il  Park- 
way      • .  150,000 

Providing  for  a  new  District  Court  House  .      .      ,  50,000 
For  the  completion  of  Riverside  Drive  and  Park    .      .  400,000 
For  a  temporary  bridge  over  the  Bronx  at  West- 
chester Avenue 35,ooo 

Providing  for  a  viaduct  over  the  railroad  at  Melrose 

Avenue  and,  163d  St 300,000 

For  a  bridge  over  the  Harlem  Railroad  tracks  at 

153d  St 150,000 

For  the  improvement  of  Crotona  Park         .      .      .  30,000 
For  an  increase  in  the  appropriation  for  the  site  for 

the  City  College 200,000 

Total $21,165,000 


KINGS  COUNTY 

For  the  improvement  of  Wallabout  Market  property  .     $       70,000 
For  enlarging  and  improving  the  47th  Regiment 

Armory 250,000 

Appropriating  for  school  purposes 500,000 

For  an  armory  for  Troop  C 350,000 

For  improving  Belmont  Ave 96,000 

Providing  for  the  repaving  of  Albany  Ave..      .     .  3 7, 000 
Appropriating  for  a  bronze  statue  of  Gen.  Fowler  7,000 
For  collection  and  preservation  of  Brooklyn  his- 
torical records 30,000 

For  school  purposes  in  the  borough  of  Brooklyn     .      .  2,500,000 
For  beginning  work  on  the  proposed  public  library 

building 10,000 

Authorizing  the  construction  of  a  public  pier  in  the 

Eighth  Ward 60,000 


72  HISTORY  OF  THE  SAVINGS  BANKS 

For  improvements  in  district  bounded  by  Coney 
Island  Ave.,  Franklin  Ave.,  Bergen  Lane,  and 
Foster  Ave $      200,000 

For  two  new  high  school  buildings 200,000 

Total $  4,310,000 

QUEENS   COUNTY 

Authorizing  the  expenditure  by  the  trustees  of 
Jamaica  for  macadamizing  and  improving  certain 
public  streets  in  that  village $      200,000 

Authorizing  the  village  of  Flushing  to  borrow  in 

anticipation  of  arrears  of  taxes,  not  to  exceed    .  35>ooo 

Authorizing  Long  Island  City  to  provide  school 

accommodations 500,000 

Authorizing  the  completion  of  improvements  on  the 
portions  of  Grand  Ave.  and  Main  St.,  Long  Island 
City 45,000 

Total $      780,000 

Let  us  not  forget  that  this  municipality  is  about  to  be- 
come the  second,  if  not  the  first,  city  in  population  in  the 
world.  In  consequence  of  this  it  must  take  upon  itself 
great  and  additional  financial  burdens  from  the  municipal- 
ities being  merged  into  and  with  it.  It  is  sadly  in  need 
of  improvements  within  the  present  confines  of  the  city. 
More  money  is  needed  for  schools,  for  improvements  to 
our  streets,  for  the  construction  of  our  municipal  buildings, 
the  improvements  of  our  waterfront,  for  the  creation  and 
maintenance  of  parks  for  our  overcrowded  population,  for 
the  enlargement  of  our  present  municipal  departments, 
and  for  the  creation  in  future  of  new  departments.  Large 
sums  will  be  required  for  the  improvement  of  our  water- 
front and  for  the  building  of  an  underground  railroad ;  and 
all  of  this  is  required  and  will  be  demanded  by  the  residents 
of  this  city,  in  order  that  we  may  satisfy  its  present  needs 
and  realize  the  hopes  of  greatness  for  the  future  gigantic 
metropolis  of  this  country. 

These  facts  need,  therefore,  our  serious  attention,  as 
our  Savings  Banks,  representing  largely  the  savings  of  the 
working  classes,  are  the  largest  creditors  of  the  Greater 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      73 

New  York;  and  it  becomes  our  bounden  duty  to  see  to  it 
that  the  burden  of  debt  shall  not  be  increased  unneces- 
sarily and  that  the  city  shall  avail  itself  of  every  opportu- 
nity to  increase  its  annual  revenue  in  a  fair  and  honorable 
manner. 

Much  has  been  said,  and  with  great  force,  of  the  de- 
sirability of  having  our  Government  debt  held  in  small 
amounts  by  the  people  at  large  as  conducive  to  loyalty 
and  as  producing  a  greater  and  more  intelligent  interest 
in  the  management  of  the  Government  itself. 

I  have  often  thought  that,  if  the  one  million  seven  hun- 
dred thousand  depositors  in  the  Savings  Banks  of  this  State 
could  be  made  to  reaUze  that  out  of  the  seven  hundred 
millions  deposited  over  one  hundred  and  sixty-four  mil- 
lions were  invested  in  various  municipal  securities  within 
the  State,  and  that  these  depositors  were,  through  us  as 
trustees,  not  only  creditors  of  these  municipalities  in 
which  they  live,  but  had  vital  moneyed  interest  in  such 
municipalities,  they  might  be  aroused  to  active  and  intel- 
ligent effort  to  secure  a  more  honest,  economical,  and 
efficient  administration  of  public  affairs  throughout  the 
State ;  and  it  seems  to  me  that  we  should  do  all  we  can  to 
educate  our  depositors  into  a  knowledge  of  these  facts, 
both  for  the  cause  of  good  government  in  our  midst  and 
for  the  added  security  which  such  knowledge  would  bring 
to  the  cause  of  good  government  throughout  the  land. 

But,  gentlemen,  I  have  said  too  much,  and  have  drifted 
badly  in  the  saying.  Perhaps  you  may  glean  a  few 
seed  from  the  thrashing  which  you  will  deem  worthy  of 
thought.  If  so,  I  will  be  the  more  content  that  I  have 
served  you  not  so  badly  after  all,  but  roughly  broken  the 
ground,  that  those,  our  guests,  who  follow  after  me,  may 
find  in  what  rich  soil  I  strove  to  do  my  planting. 


TAXATION   OF    SAVINGS    BANKS    DEPOSITS 

In  view  of  the  recommendation  of  the  State  Board  of 
Tax  Commissioners  that  "a  small  uniform  tax  payable  by 


74  HISTORY  OF  THE  SAVINGS  BANKS 

the  banks  upon  all  deposits  liable  thereto,  directly  to  the 
Comptroller  of  the  State,"  be  imposed,  the  Executive 
Committee  deemed  it  proper  to  give  to  the  Association 
its  reasons  why  the  recommendation  should  not  be  fa- 
vorably acted  upon. 

After  reminding  the  delegates  that  these  banks  were 
what  their  name  implied — banks  for  the  accounts  of  the 
small  savings  of  the  industrious  and  thrifty — that  there 
were  no  stockholders  to  participate  in  the  earnings,  as  in 
the  banks  of  discount,  and  that  absolute  safety  and  secur- 
ity were  the  first  considerations,  the  Committee  proceeded 
to  say: 

While  there  are  over  seven  hundred  millions  of  dollars 
of  deposits  in  the  banks  of  this  State,  at  least  five  hundred 
millions  of  this  sum  are  confined  to  the  banks  located  in 
large  cities  where  the  rates  of  interest  are  low.  At  the 
present  time  the  best  average  return  on  investments,  in- 
cluding bonds  and  mortgages,  State  and  municipal  securi- 
ties, is  three  and  one  half  per  cent.  It  has  been  as  low  as 
three  and  three  eighths  per  cent.,  and  with  the  general 
drift  toward  easy  money  and  large  accumulation  of 
capital,  the  probabilities  are  that  within  a  few  years  the 
average  investment  return  will  not  exceed  three  and  one 
quarter  per  cent. 

The  whole  purpose  and  object  for  which  Savings  Banks 
were  instituted  are  benevolent  ones,  to  encourage  thrift 
and  economy,  and  it  would  be  unwise  and  impoHtic,  and 
against  sound  public  policy,  to  raise  any  part  of  the  reve- 
nue of  the  State  by  a  tax  laid  upon  the  savings  of  the 
poorer  classes,  and  for  these  reasons  deposits  have  always 
been  exempt  from  taxation.  There  are  no  reasons,  either 
in  justice  or  in  the  interest  of  the  State,  that  can  be  given 
to  justify  the  enactment  of  a  measure  to  tax  Savings  Banks 
deposits. 

The  claim  that  there  are  large  sums  of  money  deposited 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      75 

in  these  banks  belonging  to  the  rich  and  well-to-do  is  best 
answered  by  the  fact  that  the  average  deposit,  due  each 
depositor  in  the  banks  of  this  State,  is  about  $413,  and, 
therefore,  the  number  of  such  deposits,  as  are  referred  to 
in  the  report  of  the  Tax  Commissioners,  must  be  very 
small. 

The  scope  of  investment  securities,  in  which  the  Sav- 
ings Banks  are  allowed  to  invest  in  the  Eastern  and  Middle 
States,  is  very  much  broader  than  that  in  this  State.  In 
the  State  of  Massachusetts  the  banks  are  carrying  from 
fifty  to  one  hundred  millions  of  their  deposits  in  loans  upon 
personal  securities,  in  the  shape  of  corporation  notes  with 
two  endorsers,  and  also  have  the  liberty  to  invest  in  many 
directions  in  municipal  and  other  securities,  including 
railroad  bonds  and  bank  stocks,  all  of  which  are  not  al- 
lowed in  this  State.  In  consequence  of  this,  the  average 
earning  power  of  such  banks,  so  located,  is  far  in  excess  of 
that  obtainable  in  the  State  of  New  York. 

To  tax  the  surplus  of  Savings  Banks  would  not  accom- 
plish anything,  even  admitting,  for  sake  of  the  argument, 
the  propriety  of  so  doing,  for  the  reason  that,  to  a  large 
extent,  this  surplus  is  specially  invested  in  United  States 
Government  and  other  non-taxable  bonds. 

The  Savings  Banks  are  now  carrying  over  eighty  per 
cent,  of  the  entire  municipal  debt  of  the  State,  and  the 
volume  of  these  investments  exceeds  $164,000,000.  The 
effect,  therefore,  of  a  tax  on  deposits  would  force  a  con- 
tinued effort  on  the  part  of  the  trustees  of  the  banks  to 
strive  to  obtain  a  better  rate  of  interest  on  securities  pur- 
chased, the  consequence  of  which  would  be  that  the  de- 
mand for  municipal  securities  within  the  State  would  be 
lessened  and  the  authorities  of  such  municipalities  would 
in  all  probability  be  unable  to  borrow  at  so  low  a  rate  of 
interest  as  is  now  obtainable,  and  the  taxpayer  would 
not  be  benefited  to  any  appreciable  extent  through  any 
tax  which  could  be  collected  through  the  Savings  Banks. 
The  banks  of  this  State  have  also  invested,  upon  bond 
mortgage  alone,  over  $344,000,000.     The  same  tendency 


76  HISTORY  OF  THE  SAVINGS  BANKS 

to  exact  higher  rates  of  interest  would  apply  to  such  loans, 
and  must  bear  heavily  upon  the  owners  of  real  estate, 
especially  in  the  farming  districts,  where  it  is  not  always 
easy  to  obtain  money  at  low  rates  of  interest. 

The  difficulty  which  now  surrounds  the  collection  of 
personal  taxes,  owing  to  the  impossibility  of  preventing 
the  removal  or  changing  the  character  of  personal  prop- 
erty, has  resulted  in  the  personal  tax  being,  in  the  main, 
collected  only  from  estates  and  widows  and  orphans,  who 
are  less  able  to  bear  the  burden,  while  the  merchant,  the 
banker,  and  the  investor  are  able,  legally,  to  free  them- 
selves from  such  liability,  owing  to  the  ramifications  of  their 
business  and  their  ability  to  so  finance  their  money  as 
not  to  be  Uable  for  such  tax;  therefore,  to  add  to  the  gross 
injustice  now  existing  by  taxing  the  hard-earned  savings 
of  the  poor,  is  certainly  unwise,  unjust,  and  a  grievous 
wrong.  Everything  should  be  done  to  encourage  thrift, 
and  the  magnificent  results  shown  through  the  wise  Sav- 
ings Bank  Law  now  in  existence,  whereby  nearly  $800,000,- 
000  of  the  people's  money  has  been  gathered  together 
and  invested  for  the  benefit  of  the  people  at  large,  in 
securities  in  which  the  mass  of  our  population,  including 
the  depositors  themselves,  are  benefited,  is  the  best  evi- 
dence obtainable  as  showing  the  injustice  of  laying  a  tax 
upon  such  deposits. 

The  complaint  already  referred  to,  that  some  moneys 
may  be  in  the  banks  which  do  not  properly  belong  there, 
may  possibly  be  true ;  but  what  can  be  said  of  the  moneys 
deposited  by  the  widows  and  orphans,  who  have  no  nat- 
ural protector  and  no  one  with  whom  they  can  advise, 
and  who  seek  the  Savings  Banks  of  the  State  as  their 
trustee,  content  with  a  small  interest  in  order  that  their 
property  may  be  absolutely  safe.  Surely  the  banks  are 
doing  no  greater  charitable  work  than  in  the  care  of  these 
modest  sums  of  money  which  are  received  by  them,  and 
wherein  is  the  justice  that  this  helpless  class  in  the  com- 
munity should  be  taxed  by  a  great  and  rich  state? 

Under  any  scheme  of  taxation  which  human  wisdom  can 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      77 

devise,  labor  must  and  will  inevitably  pay  more  than  its 
due  proportion.  Is  it  wise,  politic,  or  just  to  impose  upon 
the  small  accumulations  of  the  laborer  the  same  propor- 
tion of  taxation  that  is  imposed  upon  the  larger  accumu- 
lations of  capital?  A  provident,  economical  system  or 
agency  in  society,  promotive  of  industry,  morality,  and 
wealth,  confers  specific  advantages  upon  the  State,  in  re- 
turn for  which  exemption  from  taxation  is  no  more  than  a 
fair  offset. 

Financial  law,  good  government,  and  the  experience  of 
all  civihzed  nations  point  unerringly  to  the  fact  that  taxes 
should  be  raised  in  simple  ways  and  by  methods  which  do 
not  agitate  and  disturb  the  taxpayer  or  tend  to  discourage 
thrift  on  the  part  of  the  people.  For  a  great  state,  there- 
fore, practically  free  from  debt,  the  largest  in  population 
and  the  greatest  in  wealth  in  the  Union,  to  strive  to  lessen 
its  light  burden  of  expense  through  laying  a  tax  upon  the 
thrift  of  its  working  classes,  in  order  to  catch  and  punish 
the  few  who,  in  the  name  of  the  thrifty  poor  hold  a  few 
dollars  in  the  Savings  Banks,  would  be  a  strange  miscar- 
riage of  justice,  and  put  a  blot  upon  the  fair  name  of  the 
State,  and  show  a  lamentable  ignorance  of  those  great 
laws  of  political  economy  which  should  govern  aU  States 
and  all  communities. 

No  act  on  the  part  of  the  Legislature  could  more  seri- 
ously disturb  and  offend  at  least  three  hundred  thousand 
of  our  voting  population  than  to  attempt  to  tax  the 
moneys  laid  by  for  a  rainy  day,  to  ward  off  poverty  when 
the  protecting  hand  has  been  withdrawn,  or  to  bury  their 
dead  in  their  hour  of  sorrow. 


On  motion,  the  courtesy  of  the  platform  was  extended 
to  the  guests  of  the  Convention,  the  Hon.  F.  D.  Kilburn, 
State  Superintendent  of  Banking,  Mr.  W.  L.  Trenholm, 
former  Comptroller  of  the  Currency,  and  the  Hon.  Edward 
Atkinson,  the  well-known  writer  and  lecturer  upon  eco- 
nomic subjects. 


78  HISTORY  OF  THE  SAVINGS  BANKS 


ADDRESS  OF  HON.  F.  D.  KILBURN 

I  wish  to  thank  you  for  the  kindly  interest  you  have 
taken  in  me  and  for  the  good  words  that  have  been  said  of 
me.     I  have  had  the  support  of  this  Association  during 
the  year  that  I  have  had  the  honor  of  being  the  Superin- 
tendent of  Banks  of  this  State,  and  I  can  say  that  I  have 
yet  to  find  any  proposition  coming  from  a  Savings  Bank 
officer  that  in  anywise  pointed  toward  anything  that  was 
in  the  least  detrimental  to  the  interests  of  the  depositors 
of  the  banks  which  you  represent.     (Applause.)     A  more 
conservative  lot  of  men  do  not  exist  in  this  State  than 
those  who  are  at  the  head  of  the  Savings  Banks  of  the 
State.     When  we  consider  that  not  for  the  last  eighteen 
years  has  there  been  a  failure  of  a  Savings  Bank  in  this 
State,  we  may  somewhat  realize  the  conservative  methods 
that  have  ruled  the  Savings  Banks  under  your  charge. 
During  that  time  four  banks  in  order  to  make  themselves 
solvent  have  had  to  scale  their  assets.     I  think  fifteen  per 
cent,  is  the  maximum  amount  that  has  been  found  neces- 
sary to  make  them  solvent.     Three  of  these  banks  have 
met  the  difficulties  which  they  have  encountered  through 
connection  with  other  banks  doing  business  in  the  same 
rooms,  and  using  the  same  vault,  and  officered  by  the  same 
men.    To  be  sure  Savings  Banks  have  made  losses  more 
or  less,  but  to  no  extent  that  they  could  not  well  meet  and 
pay  out  of  their  surplus  account.     When  we  consider  the 
great  amount  of  money  in  your  cliarge  and  the  vast  num- 
ber of  people  who  are  your  depositors,  we  can  have  a  faint 
conception  of  the  enormous  responsibility  which  rests  up- 
on your  shoulders.     No  other  class  of  men  in  this  State, 
in  my  judgment,  holds  so  great  a  trust  as  is  cormnitted 
into  your  hands  and  with  so  little  question  on  the  part  of 
those  interested.     Why,  the  Savings  Banks  of  this  State, 
gentlemen,  have  come  to  be  known  as  absolutely  safe. 
Nobody  questions  the  seciirity  of  a  Savings  Bank  in  this 
State  to-day,  and  in  my  judgment  it  is  owing  principally 
to  two  things:  first,  the  character  of  the  men  who  have 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      79 

charge  of  these  institutions,  and,  secondly,  the  laws  which 
govern  the  investments  of  the  money  that  is  placed  in 
your  charge.  Attempts  are  being  made  from  year  to 
year,  as  has  been  reported  by  your  Executive  Committee, 
for  the  purpose  of  letting  down  the  bars  and  making 
your  administration  if  possible  less  conservative.  Bills  are 
being  introduced  every  year  into  the  Legislature  of  our 
State  which  seem  fair — that  is,  a  great  many  of  them  have 
an  appearance  of  fairness  on  their  face.  Now  the  propo- 
sition that  you  shall  send  to  every  depositor  once  a  year 
a  notice  of  the  amount  standing  upon  the  books  of  the 
bank  is  apparently  a  fair  proposition.  At  first  glance  it 
seems  to  be  in  the  interest  of  the  depositors,  but  when  you 
come  to  analyze  it  you  find  that  it  is  not  in  the  interest  of 
the  depositors,  but  rather  in  the  interests  of  some  men  who 
wish  to  do  some  law  business  for  depositors,  and  who  are 
trying  to  see  if  they  cannot  induce  the  depositors  to  allow 
them  to  collect  money  from  the  Savings  Banks.  I  have 
heard  of  one  or  two  extreme  cases  where  men  have  gone 
to  a  depositor  and  told  him  that  they  knew  where  he  had 
some  money,  and  that  for  a  certain  percentage,  generally 
a  large  one  of  course,  they  would  get  it  for  him.  Well, 
the  depositor  didn't  know  where  he  had  any  money  that 
he  didn't  know  about.  He  knew  he  had  some  money  in  a 
Savings  Bank,  but  he  did  not  think  that  was  the  money 
alluded  to,  and  so  he  says:  "I  can't  lose  anythmg  anyhow, 
and  I  will  get  a  certain  sum  that  I  did  not  know  I  had  or 
was  entitled  to,"  and  so  he  is  enticed  into  the  scheme;  and 
in  several  instances  such  men  have  entered  into  a  written 
contract  with  these  fellows,  and  of  com-se  it  has  simply 
resulted  in  it  turning  out  that  the  money  meant  was  the 
money  which  Vv^as  on  deposit  in  the  Savings  Bank.  Now 
that  is  the  purpose  of  this  bill  which  has  been  introduced  in 
the  Legislature  for  the  last  several  years  at  least,  so  as  to 
give  the  men  who  are  tr3^'ing  to  pick  up  some  money  in  this 
way  an  opportunity  to  do  some  business  in  the  way  I  have 
indicated.  I  have  found,  however,  that  when  the  ordi- 
nary legislator  understands  the  true  meaning  of  a  bill,  you 


8o  HISTORY  OF  THE  SAVINGS  BANKS 

have  not  much  difficulty  in  convincing  him  to  take  the 
right  view  of  it.  I  think  Mr.  Rhoades,  your  President, 
and  Mr.  Rainey,  of  your  Executive  Committee,  will  bear 
me  out  in  the  statement  that  they  have  found  the  men  in 
the  Legislature,  as  a  rule,  very  fair  and  reasonable  upon 
these  propositions,  and  not  at  all  desirous  of  passing  any 
legislation  which  would  be  detrimental  to  the  Savings  Banks 
of  this  State. 

Gentlemen,  you  have  the  money  of  more  than  one 
quarter  of  the  people  of  this  State  in  your  custody.  You 
have  over  seven  hundred  millions  of  dollars  of  the  people's 
money  in  your  possession.  It  is  an  enormous  responsi- 
bility, and  I  do  not  beUeve  that  the  laws  of  this  State 
should  be  modified  at  all.  On  the  contrary,  I  think  if 
anything  is  done  with  the  laws  that  govern  the  Savings 
Banks  of  this  State,  they  should  be  made,  if  possible,  more 
stringent  than  they  are. 

Gentlemen,  I  wish  to  express  my  gratitude  to  you,  and 
to  your  Association  as  a  whole,  and  to  Mr.  Rhoades,  your 
President,  and  to  Mr.  Rainey,  of  your  Executive  Com- 
mittee, particularly,  and  to  all  with  whom  I  have  come  in 
official  contact,  for  your  kindness  and  consideration  to  me 
on  all  occasions. 

ADDRESS   OF   HON.   WILLIAM   L.    TRENHOLM 

Mr.  President  and  Gentlemen:  I  feel  somewhat  dif- 
fident in  rising,  after  so  flattering  an  announcement  as  the 
one  made  by  your  President.  I  hope  he  has  not  raised 
expectations  beyond  my  power  to  fulfil.  I  wrote  this 
paper  before  I  knew  what  the  President  was  going  to  say 
about  me.  Perhaps  I  would  have  worked  over  it  harder 
and  tried  to  make  it  better  if  I  had  known  how  compli- 
mentary he  was  going  to  be,  but  I  came  here  upon  the 
invitation  of  your  Committee  to  contribute  my  mite,  if 
I  may  say  so,  toward  helping  you,  gentlemen,  or  at  least 
toward  encouraging  you,  in  what  I  believe  to  be  a  good 
work  that  you  have  in  hand,  and  that  is,  disseminating 
among  that  quarter  of  the  population  of  this  State  with 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      Si 

whom  you  come  in  contact  sound  monetary  and  economic 
doctrine.  It  was  with  that  idea  that  I  prepared  this 
paper,  and  to  that  end  I  invite  your  attention  to  it. 

The  most  pressing  need  of  the  people  of  the  United 
States  to-day  is  a  generally  diffused  elementary  knowledge 
of  economic  science. 

Every  voter  should  be  able  to  discern  the  difference  be- 
tween an  economic  truth  and  a  demagogic  fallacy;  for, 
unfortunately,  as  the  poisonous  toadstool  resembles  the 
succulent  mushroom,  so  does  the  economics  fallacy  put 
on  the  appearance  of  truth,  insomuch  that  whole  communi- 
ties are  suffering  because  a  majority  of  their  voters  have 
mistaken  the  toadstools  of  their  political  theorists  for  the 
mushrooms  of  the  political  economists. 

Such  suffering  must  continue,  and  will  even  extend  more 
widely,  until  at  least  a  majority  of  our  voters  attain  suf- 
ficient knowledge  on  the  subject  to  enable  them  to  select 
as  their  Senators  and  Representatives  in  Congress,  and  in 
the  State  Legislatures,  only  men  quahfied  to  deal  under- 
standingly,  and,  therefore,  wisely,  with  the  important  eco- 
nomic questions  which  at  present  dominate  both  local  and 
natipnal  politics,  and  which  apparently  must  be  settled, 
ultimately,  by  the  people  at  the  ballot-box. 

Some  of  these  questions  involve  the  public  utility, 
perhaps  even  the  future  lawfulness,  of  long-established 
methods  of  business  and  widely  accepted  principles  of 
commercial  dealings;  while  others  affect  the  scope,  and 
indeed  the  further  existence,  of  corporation,s  and  other 
associations  by  means  of  which  men,  having  common  in- 
terest and  objects,  have  been  accustomed  to  unite  their 
means  and  abilities  for  the  more  effective  protection  of 
those  interests  and  the  surer  accomplishment  of  those 
objects. 

The  commercial  methods  and  principles,  the  combina- 
tions of  effort  and  of  capital  that  are  thus  called  in  ques- 
tion, have  heretofore  been  regarded  as  the  products  of  a 
natural  and  healthy  economic  evolution.  As  such  they 
have  been  accepted  by  all  our  people,  and  we  are  all  de- 


82  fflSTORY  OF  THE  SAVINGS  BANKS 

pendent  upon  them  in  greater  or  less  degree.  They  have 
so  completely  taken  possession  of  every  department  of 
industry,  of  every  branch  of  trade,  of  all  our  systems  and 
channels  of  transportation,  of  our  banking  arrangements 
and  internal  exchanges,  that  to  disturb  them  is  to  provoke 
an  undustrial,  financial,  and  social  revolution,  co-extensive 
with  the  national  domain. 

It  is  manifest  that  when  such  far-reaching  questions 
once  absorb  public  attention  all  other  issues  will  be  post- 
poned until  these  are  settled ;  and  it  is  well  that  this  is  so, 
for  a  speedy  settlement  is  of  pressing  importance. 

It  may  be  expected,  therefore,  that  for  many  months 
to  come — ^perhaps  for  years — the  minds  of  voters  will  be 
occupied  with  these  matters;  and  hence,  although  truth 
and  right  must  finally  prevail,  every  man  who  can  en- 
lighten the  understandings  and  guide  aright  the  thoughts 
of  others  should  do  his  utmost  toward  producing  a  public 
sentiment  that  alone  can  thwart  and  speedily  defeat  the 
agitators  who  are  now  so  disastrously  disturbing  the  indus- 
trial peace  of  the  country. 

It  seems  to  me  that  you,  gentlemen,  officers  of  Savings 
Banks,  can  do  good  service  by  taking  part  in  the  discussion 
of  these  questions.  You  enjoy  exceptional  opportunities 
for  giving  object-lessons  to  great  numbers  of  our  fellow- 
citizens,  who  are,  of  aU  others,  the  most  deeply  interested 
in  good  economic  legislation.  You  can  show  to  your 
depositors,  on  the  one  hand,  and  on  the  other  hand  to 
those  to  whom,  on  the  security  of  their  property,  you  lend 
the  money  of  these  depositors,  how  closely  related  are  the 
interests  of  lenders  and  borrowers;  how  necessary  the 
secure  tenure  of  property  is  to  the  very  existence  of  labor- 
employing  industries.  A  Savings  Bank  exists  only  by 
being  both  debtor  and  creditor,  especially  when,  as  in  this 
State,  it  has  no  capital  and  consequently  no  stockholders. 
Any  person  of  ordinary  intelligence  can  be  made  to  under- 
stand that  the  depositors  in  such  an  institution  are  the 
capitalists  who  really  own  the  money  it  lends  to  borrowers ; 
and  hence,  that  every  such  depositor,  however  small  his 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      83 

deposit  may  be,  should  find  out,  surely,  how  any  proposed 
legislation  touches  the  interests  of  capital  before  he  com- 
mits himself  in  favor  of  it.  The  creditors  of  a  Savings 
Bank,  its  depositors,  belong  generally  to  the  "masses," 
its  debtors  to  the  "classes"  so-called.  Is  it  not  well,  and 
will  it  not  be  easy,  to  have  this  understood?  The  politi- 
cians pretend  that  the  "  masses"  alone  are  the  debtors,  and 
that  all  capitalists  and  creditors  belong  to  the  "Classes." 
Again,  a  Savings  Bank  is  an  agency  by  means  of  which  its 
numerous  depositors  are  able  to  combine  their  several  small 
capitals  into  larger  masses,  thus  securing  by  combination 
a  rate  of  interest  which  could  not  be  obtained  with  equal 
security  if  each  had  to  lend  out  his  own  capital  separately. 
Here  is  an  object-lesson  for  those  who  are  being  cajoled 
to  their  own  detriment  by  the  politicians  through  legis- 
lation which  makes  it  a  crime  for  any  one  to  contribute  to 
effecting  combinations  of  capital,  which,  whatever  their 
design,  may  result  in  so  vague  a  thing  as  "the  restraint 
of  trade."  Every  depositor  in  a  Savings  Bank  is  in  dan- 
ger of  being  made  a  criminal  by  the  mere  enactment  of  the 
anti-trust  laws  of  this  enlightened  State  of  New  York. 
If  those  laws  should  be  strictly  interpreted  and  impar- 
tially enforced,  who  can  escape? 

No  doubt  it  sometimes  occurs  that  the  officers  of  a  given 
Savings  Bank  will  be  able  to  show  practically  how  the 
savings  of  the  laborers  in  a  local  factory,  or  other  indus- 
trial establishment,  become  combined  by  deposit  in  the 
bank  into  large  sums  which  are  lent  by  the  bank  to  that 
very  establishment,  thereby  increasing  its  facilities  and 
enlarging  its  laboring  force.  Here  would  be  an  opportunity 
to  impress  upon  both  employers  and  employed  the  great 
truth  that  organized  industry  is  the  solvent  which  blends 
harmoniously  and  indistinguishably  the  interests  of  labor 
and  capital.  This  truth  is  not  self-evident,  but  it  needs 
but  little  argument  to  be  proven.  Every  organized  indus- 
try in  this  country  is  subject  to  competition  with  similar 
organizations  both  here  and  abroad,  and  as  long  as  they 
compete  on  equal  terms  they  should  all  succeed;  but  any 


84  HISTORY  OF  THE  SAVINGS  BANKS 

such  industry,  wherever  situated,  will  surely  fail  if  it 
should  be  burdened  more  than  its  competitors.  If  the 
masses  of  our  people  could  be  taught  to  see  things  as  they 
really  are,  they  would  perceive  that,  when  labor  and 
capital  make  a  partnership  in  New  York  to  compete  with 
a  similar  partnership  between  labor  and  capital  in  New 
England,  New  Jersey,  or  in  Europe,  any  burden  laid  upon 
either  labor  or  capital  in  any  one  of  these  places  is  a  bur- 
den upon  the  partnership,  handicapping  it  in  the  com- 
petition and  inflicting  a  loss  that  has  eventually  to  be 
shared  between  the  partners,  without  regard  to  which  one 
was  primarily  subjected  to  it.  Any  burden  upon  capital 
here  places  a  premium  upon  capital  similarly  employed 
elsewhere;  any  burden  upon  labor  here  benefits  labor 
elsewhere;  any  burden  upon  a  combination  of  labor  and 
capital  here  gives,  inevitably,  greater  profits  to  similar 
combinations  of  labor  and  capital  elsewhere. 

Suppose  the  case  is  put  this  way:  Capital  and  labor 
are  the  two  legs  upon  which  industry  walks.  No  man  can 
favor  one  of  his  legs  except  by  fettering  the  other,  and 
there  never  yet  has  been  a  man  with  one  leg  free  and  a 
ball  and  chain  on  the  other  who  would  not  be  a  faster 
mxover  and  a  happier  fellow  if  both  legs  were  free. 

From  of  old  until  recent  years  European  industry  had 
its  labor  leg  fettered ;  for  about  one  hundred  years  Ameri- 
can industry  has  had  both  legs  free,  and  all  the  world  has 
been  amazed  at  its  strides;  but  now  we  are  putting  fetters 
on  the  capital  leg,  and  wonder  that  industry  halts  in  its 
pace! 

England,  where  capital  has  always  been  unfettered  and 
vested  rights  secure,  struck  the  fetters  from  the  labor  leg 
of  her  industries  when  she  abolished  the  corn  laws,  and 
s,o  made  bread  cheap;  and  since  that  day  she  has  had 
both  legs  free,  and  all  her  people  prospered.  The  inter- 
ests of  capital  in  England  shared  in  the  benefits  following 
the  unfettering  of  labor  there,  while  the  magnitude  of  our 
Savings  Banks  deposits  is  conclusive  proof  that  American 
labor  got  its  full  share  of  the  prosperity  that  fairly  deluged 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      85 

this  country  as  long  as  capital  was  free  from  the  threats 
and  assaults  of  politicians.  "Why,"  you  are  entitled  to 
ask  your  depositors,  "why  should  we  not  revert  to  our 
former  estate  of  unfettered  industry,  since  we  have  seen 
how  England  has  been  prospering  while  we  have  been 
suffering  from  industrial  paralysis?  " 

This  industrial  paralysis,  our  political  wiseacres  tell 
us,  is  the  result  of  an  irrepressible  conflict  between  labor 
and  capital;  they  pretend  that  capital  has  been  oppressing 
labor  and  that  legislation  is  necessary  in  order  to  protect 
labor  from  capital.  If  the  magnitude  of  the  deposits 
in  the  Savings  Banks  of  this  State  is  the  measure  of  the 
oppression  of  labor  by  capital,  the  more  of  that  oppression 
we  have  the  richer  will  our  laborers  become. 

The  truth  is,  capital  cannot  oppress  labor  without 
detriment  to  its  own  interests;  and  labor  cannot  oppress 
capital  without  like  detriment  to  itself. 

Taking  the  community  as  a  whole,  capital  and  labor  are 
partners,  as  I  have  said,  and  what  hurts  one  hurts  both. 
But,  say  the  politicians,  in  particular  cases  the  profits  of 
the  partnership  are  not  fairly  divided — capital  exacts  too 
large  a  share.  The  answer  is:  "Leave  both  capital  and 
labor  free  to  make  their  owti  bargains,  and  trust  the  result  to 
the  operation  of  those  natural  economic  laws  which  Divine 
wisdom  has  devised  to  provide  for  these  very  cases." 

We  may  well  say  to  those  who  are  trying  to  nullify  great 
Nature's  ordinances  by  statutes  enacted  at  Albany  and 
Washington:  "Look  far  and  wide  upon  this  glorious  coun- 
try of  ours,  its  seventy  millions  of  people  well  fed,  well 
clad,  well  housed,  its  cities,  railroads,  and  steamboats,  its 
factories,  mines,  forests,  and  fields,  its  infinitely  varied 
resources,  and  its  abounding  products.  Does  it  not  seem 
beyond  comprehension,  almost,  that  aU  this  affluence  of 
wealth  and  power  should  have  been  accumulated  during 
little  more  than  a  century  of  national  life?  " 

A  hundred  years  or  so  ago  the  thirteen  colonies  began 
their  free  and  independent  political  existence.  Thirteen 
little  seedling  communities  torn  by  the  rude  hand  of  Rev- 


86  HISTORY  OF  THE  SAVINGS  BANKS 

olution  from  the  parent  Civilization  and  thrust  bruised 
and  ragged  as  they  were  into  the  soil  of  an  unexplored 
continent. 

Three  millions  of  people  in  all,  scattered  along  more 
than  a  thousand  miles  of  coast,  with  three  thousand  miles 
of  sea  in  their  front,  and  a  still  greater  expanse  of  primeval 
forest  at  their  back. 

A  hundred  years  ago  there  was  not  anywhere  on  the 
continent  of  North  America  a  steam  engine  of  any  kind, 
not  a  mine,  not  a  spinning  frame,  not  a  power  loom,  nor 
anything  that  would  now  be  called  a  factory;  not  an  agri- 
cultural implement,  except  the  simplest  forms  of  hoes, 
rakes,  and  plows;  hardly  any  paved  streets,  and  very  few 
miles  of  road  practicable  all  the  year  round. 

Set  this  picture  of  our  country  as  it  was  in  1797  against 
your  knowledge  of  it  as  it  is  in  1897;  and  then  believe,  if 
you  can,  that  this  great  change  could  have  been  wrought 
if  the  statutes  of  to-day  had  been  in  force  during  that  hun- 
dred years.  Indeed,  it  was  from  the  eighteenth  century 
prototypes  of  these  very  statutes  that  the  colonial  fathers 
sought  relief  in  emigration,  and  against  the  extension  of 
them  to  the  colonies  that  the  Revolutionary  patriots  took 
up  arms;  yet  to-day  we  have  deliberately  reenacted  these 
laws,  and  are  wondering  that  so  many  people  are  impover- 
ished, harassed,  and  dissatisfied.  If  we  and  our  children 
had  been  taught  economics  as  we  were  taught  heroics;  if 
the  industrial  value  of  personal  freedom  were  as  well  under- 
stood as  is  its  priceless  political  value,  everybody  would 
know  that  meddlesome  laws  destroy  prosperity  and  breed 
discontent.  No  one  would  suppose  that  men  can  pros- 
per, or  that  they  can  be  happy,  if  they  are  compelled, 
like  half-broken  setters  and  pointers,  to  hunt  industrial 
fields  with  spiked  collars  and  checkstrings  on  their  brains, 
or  that  they  can  keep  up  in  the  industrial  race  with  the 
free  men  of  other  communities,  when  their  own  State  or 
country  handicaps  them  with  statutory  burdens  upon 
either  the  capital  or  the  labor  necessary  to  their  success. 

It  may  perhaps  seem  a  great  task  to  educate  the  masses 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      87 

of  voters  in  elementary  economics,  but  they  will  really 
educate  themselves  if  once  they  become  emancipated 
from  the  prejudices  which  are  bred  by  narrowness  of 
environment,  and  which  have  been  fostered  by  the  poli- 
ticians and  so-called  labor  leaders.  All  that  is  needed  is 
that  they  should  do  their  own  thinking,  and  the  first  step 
in  that  direction  is  for  them  to  learn  that  the  way  to  under- 
stand and  to  test  the  truth  of  economic  principles  is  by 
studying  the  various  industrial  facts  within  their  own  ob- 
servation, and  by  applying  what  they  thus  learn  about  the 
things  with  which  they  are  familiar,  they  will  soon  dis- 
cover how  to  form  correct  opinions  on  the  greater  ques- 
tions upon  which  they  are  called  upon  to  vote.  The  daily 
operations  of  Savings  Banks  supply  many  most  instruc- 
tive economic  facts  in  a  form  easily  understood. 

Charlatans  and  others  who  mislead  the  people  on  these 
subjects  always  deal  in  generalities,  and  confuse  their 
followers  with  great  numbers.  Millions  and  billions  are 
incomprehensible  to  the  average  voter,  and  he  is  bewU- 
deringly  impressed  by  an  orator  who  seems  familiar  with 
what  men  do  and  think  when  they  are  numbered  by  the 
million,  and  what  dollars  are  capable  of  accomphshing 
when  they  are  aggregated  into  billions;  but  you  gentle- 
men can  explain  that  a  million  men  can  do  no  more  than 
one  man  repeating  his  effort  a  million  times,  and,  there- 
fore, while  a  million  men,  by  combining,  may  accomplish 
in  one  year  what  no  one  man  could  accomplish  unless  he 
lived  a  million  years,  still  the  Hmits  of  human  capacity 
are  not  enlarged  by  aggregating  individuals;  indeed,  they 
are  rather  lessened,  since  the  average  capacity  only  pre- 
vails when  large  numbers  combine.  It  is  demonstrable 
that  a  thousand  men,  taken  indiscriminately,  cannot  ac- 
complish a  thousand  times  as  much  as  one  man  specially 
selected  for  the  thing  to  be  accomplished.  Men  con- 
strained to  move  or  act  in  combination  generally  lose 
capacity — the  average  soldier  will  travel  faster,  farther, 
and  with  less  fatigue  walking  alone  than  he  can  do  march- 
ing in  the  ranks. 


88  HISTORY  OF  THE  SAVINGS  BANKS 

All  this  goes  to  show  that  when  men  combine  in  cor- 
porations they  do  not  gain  capacity  necessarily,  and  there- 
fore there  is  no  reason  to  fear  that  corporations  will  ex- 
tinguish or  even  discourage  individual  effort. 

As  with  men  so  with  dollars.  A  million  dollars  will 
buy  property  or  products  a  million  times  more  valuable 
than  property  or  products  purchasable  with  one  dollar, 
but  there  the  advantage  of  the  greater  sum  ends.  When 
A  pays  a  dollar  for  a  yard  of  silk,  he  parts  with  his  dollar 
and  has  the  silk;  so  when  B  buys  a  million  yards  of  silk 
for  a  miUion  dollars,  he  parts  with  his  million  dollars  and 
has  the  silk. 

If  you  gentlemen  can  only  succeed  in  disseminating  one 
primary  truth  among  the  people  you  will  do  a  great  deal. 
It  is  the  truth  which  Adam  Smith  made  the  basis  of  his 
political  economy,  and  which  lies  at  the  root  of  all  sound 
economic  doctrine,  namely,  that  not  money,  but  money's 
worth,  value,  is  the  object  of  pursuit  in  communities 
which,  like  ours,  are  engaged  in  industry. 

The  money  that  comes  as  wages  to  the  laborer  goes 
out  again:  a  part  is  paid  for  expenses,  the  balance  is  paid 
into  the  Savings  Bank.  Where  is  the  money  itself?  Gone ; 
he  knows  it,  but  is  satisfied.  He  has  the  entry  in  his  bank 
book,  and  he  prefers  that  to  money.  Why?  Because 
that  draws  interest,  while  the  money  never  draws  interest. 
This  man  who  has  a  Savings  Bank  book  is  a  capitalist, 
while  the  grocer,  to  whom  he  probably  looks  up  socially, 
has  no  bank  account  drawing  interest.  The  grocer  and 
all  other  traders  pay  interest  to  banks;  they  receive  none. 
Their  need  to  borrow  capital  contributes  to  the  economic 
adjustments  which  enable  the  Savings  Banks  to  pay  in- 
terest to  their  depositors. 

The  Savings  Bank  depositor,  besides  drawing  interest  on 
his  deposit,  is  vitally  interested  in  the  ability  of  the  bank 
to  return  to  him  on  demand  the  principal  sum  of  money 
on  which  interest  has  been  paid;  and  here  the  question  of 
money's  worth  comes  home  to  him  in  a  vital  way.  If, 
through  the  fault  or  the  misfortune  of  the  Government 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      89 

or  the  community,  the  money  in  circulation  becomes  de- 
preciated in  real  value,  those  to  whom  payments  are  due 
suffer,  each  in  proportion  to  the  amount  he  is  to  receive, 
the  fuU  effect  of  such  depreciation.  When,  for  example, 
depositors  in  the  Savings  Banks  represented  here  to-day 
desire  to  withdraw  their  deposits,  they  will  receive  money 
that  will  buy  just  as  much  as  the  money  they  put  into  the 
bank;  whereas,  had  the  basis  of  our  currency  been  changed 
from  the  dollar  of  gold  to  the  dollar  of  silver,  each  deposi- 
tor, in  withdrawing  his  deposit,  would  find  that  it  would 
purchase  only  hah  as  much  as  the  money  he  had  put  in 
before  the  change  took  place. 

It  is  a  momentous  thing  to  a  poor  man  to  have  the  value 
of  his  savings  cut  in  half.  The  rich  men  are  making  a 
great  outcry  because  it  is  proposed  to  assess  upon  their 
estates  a  tax  varying  from  ten  to  twenty  per  cent,  upon 
the  value  of  that  which  they  leave  behmd  them.  This 
measure  of  taxation  is  supposed  to  be  in  the  interest  of  the 
poor;  and  yet  great  numbers  of  those  who  have  advocated 
the  tax  are  also  advocates  of  a  monetary  system  which 
will  tax  the  thrifty  poor  man  who  has  a  Savings  Bank 
deposit  quite  fifty  per  cent,  of  his  savmgs,  as  against  the 
tenor  twenty  per  cent,  which  the  law  proposes  to  exact 
from  the  rich  man. 

I  hate  appeals  made  to  men  as  rich  or  poor.  In  a  re- 
public all  men  are  equal  before  the  law;  and  the  law  should 
be  bhnd  to  inequahties  of  fortune  as  Nature  is  bUnd  to  the 
inequaUties  of  opportunity.  In  a  republic  the  law  should 
make  it  easy  for  every  man,  be  he  rich  or  poor,  to  better 
his  condition,  to  accumulate  wealth,  and  to  acquire  prop- 
erty to  the  full  value  represented  by  the  personal  effort 
or  the  accumulated  savings  which  he  has  put  into  its  ac- 
quisition. The  very  politicians  who  insist  upon  always 
harping  upon  the  inequalities  of  fortune  have  been  for  a 
long  time  creating  and  aggravating  inequahties  of  oppor- 
tunity, and  now  they  are  attributing  to  the  greed  of  the 
wealthy,  or  to  the  craft  of  those  employed  by  corporations, 
economic  conditions  which  are  only  the  fruit  of  unwise  and 


90  HISTORY  OF  THE  SAVINGS  BANKS 

improvident  laws.  These  laws  have  been  placed  upon  the 
statute  books  by  the  aid  and  with  the  concurrence  of  the 
very  men  who  use  their  injurious  effects  as  political  capital 
in  their  trade  of  mischief-making  agitation.  Mr.  Micaw- 
ber,  as  we  all  know,  defined  riches  to  be  an  excess,  however 
small,  of  income  over  out-go;  and  poverty  to  be  an  excess, 
however  small,  of  out-go  over  income;  and  this,  after  all, 
is  the  final  difference.  One  man  who  saves  from  his  in- 
come enough  to  put  up  money  in  bank  is  rich  in  compari- 
son with  his  neighbor  who,  receiving  the  same  income  and 
spending  more  freely,  puts  up  nothing.  Why  should  the 
law  distinguish  between  these  two  men  to  the  injury  of 
him  who  saves?  By  saving  he  contributes  to  the  available 
productive  capital  of  the  country;  he  contributes  to  the 
enlargement  of  its  industrial  facilities,  and  therefore  to 
larger  employment  of  labor. 

You  will  observe,  gentlemen,  that  I  have  only  skimmed 
over  the  surface,  as  it  were,  of  the  suggestive  field  of  thought 
to  which  the  invitation  of  your  Committee  has  opened  the 
way.  No  doubt  you  will  all  be  able  to  turn  to  advantage 
the  opportunities  afforded  by  your  close  relations  with 
large  bodies  of  our  fellow-citizens;  and  if  in  the  course  of 
your  dealings  and  communications  with  them  anything 
here  said  may  suggest  how  an  economic  truth  may  be  il- 
lustrated or  enforced,  I  shall  feel  all  the  more  grateful  to 
you  for  having  afforded  me  an  opportunity  of  saying  what 
I  have  said,  and  for  having  been  listened  to  so  patiently. 

ADDRESS   OF   HON.    EDWARD  ATKINSON,   PH.D.,   LL.D. 

Mr.  President  and  Gentlemen:  After  struggling  through- 
out the  last  campaign  with  the  national  grip  and  virus  of 
the  silver  craze,  I  myself  was  subjected  to  a  slight  attack 
of  the  physical  grip,  which  leaves  the  human  body  in  about 
the  condition  which  that  attack  of  national  grip  has  left 
the  business  community  of  this  country,  and,  while  resting 
in  a  state  of  almost  compulsory  idleness  at  the  Hot  Springs 
of  Virginia,  I  made  my  first  personal  acquaintance  with 
your  President,  whom  I  had  long  known  and  with  whom 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      91 

I  believe  I  have  previously  had  some  correspondence,  I  was 
surprised  that  I  should  find  such  a  visionary  man  at  the 
head  of  this  great  bodv  of  practical  men.  .  .  .  The  evi- 
dence of  this  was  that  he  actually  had  the  audacity  to  sug- 
gest, to  beHeve,  and  to  persuade  me  that  I  could  come  here 
and 'tell  you  anything  about  the  right  conduct  of  Savings 
Banks,  with  which  I  myself  have  had  but  slight  direct 
connection.  I  have  been  able  to  treat  you  only  with 
scant  courtesy— for  in  the  few  days  that  have  elapsed 
since  my  return  my  time  has  been  so  fully  occupied  with 
the  necessary  conduct  of  business  that  all  I  could  do  has 
been  to  put  down  a  few  notes  and  to  trust  to  the  spur  of  the 
moment  mainly  for  what  I  may  have  to  say.  ^  I  should 
have  carefully  prepared  had  the  time  been  sufficient— spe- 
cially prepared  for  the  reporters,  whom  I  always  try^  to 
save  from  the  effort  to  report  word  for  word,  by  reporting 
myself  in  multiple  copy.  I  have  been  unable  to  do  that 
at  this  time. 

As  I  sat  here  listening  to  what  you  had  placed  before 
you  to-day,  I  find  a  very  complete  analogy  between  my 
own  functions  and  that  of  yourselves.  The  work  of  my 
life  for  the  last  twenty  years  has  been  to  develop  the 
science  of  prevention  of  loss  by  fire  among  the  factories  of 
New  England,  New  York,  and  the  other  Middle  States. 
I  stand  as  the  President  of  one  of  the  larger  companies,  of 
whom  there  are  but  few,  the  work  of  several  others  hav- 
ing been  developed  mainly  under  our  direction,  insuring 
over  seven  hundred  million  dollars'  ($700,000,000)  worth 
of  the  factory  property  in  which  so  many  of  those  whose 
savings  you  have  charge  of  have  been  earned.  You  have 
been  successful  as  we  have  in  saving  waste.  We  have 
brought  down  the  losses  in  specially  hazardous  property 
to  a  little  fraction  of  less  than  twenty  cents  a  year  for  the 
cost  of  insurance  from  year  to  year  for  the  last  twenty 
years  on  each  $100  of  insurance;  for  the  last  year  to  less 
than  ten  cents;  thus  saving  the  tools  and  implements  and 
mechanism  by  which  our  depositors  so  largely  gain  their 
savmgs.    And  how  have  we  done  it?    We  have  worked 


92  HISTORY  OF  THE  SAVINGS  BANKS 

that  great  change  from  former  times  by  bringing  to  the 
owners  of  that  property  the  true  conception  of  their  duty 
to  the  property  itself,  proving  to  them  that  they  them- 
selves were  the  only  men  who  can  insure  their  property 
against  loss  by  fire  by  taking  due  precaution  in  the  con- 
struction, in  the  protection,  and  in  the  conduct  of  their 
own  work.  When  they  had  performed  their  own  duty 
to  their  own  property  and  not  before,  then  we  may  safely 
come  in  and  give  them  contracts  of  indemnity  against  the 
unavoidable  losses,  reducing  them  to  a  fraction  of  what 
they  have  been.  That  is  also  your  function,  or  should  be 
as  pointed  out  to  you  to-day — to  bring  to  your  depositors 
the  conception  that  they  only  are  the  men  who  can  bring 
about  good  government,  the  right  conduct  of  the  State, 
and  the  right  protection  of  the  people  against  the  incen- 
diaries who  would  plunder  them  through  the  processes  of 
law,  or  take  away  from  them  the  savings  of  their  life-time 
by  bad  legislation.  There  is,  therefore,  a  close  analogy 
between  the  functions  which  I  discharge  and  those  which 
you  discharge. 

I  once  took  part  in  a  very  notable  meeting  in  this  city, 
when  the  inflation  bill  of  1874  was  pending  in  the  Senate 
of  the  United  States,  when  at  the  instance  of  Vice-President 
Wilson  I  acted  with  others  in  bringing  to  President  Grant 
the  knowledge  of  the  fact  that  there  was  outside  of  the 
atmosphere  of  Washington — where  the  pressure  was  all 
for  inflation — a  public  opinion  that  would  support  him  in 
doing  what  he  himself  believed  to  be  his  duty  in  vetoing 
that  bad  measure.  I  had  the  satisfaction  in  learning  from 
ex-President  Grant's  own  lips,  when  I  met  him  in  Europe 
after  he  had  left  the  high  office,  that  it  was  due  to  the  great 
meetings  held  here  in  Cooper  Institute  and  Faneuil  Hall 
in  Boston,  and  to  the  memorials  that  came  to  him  from 
every  great  Western  city,  each  signed  by  men  that  he 
knew,  that  he  was  convinced  that  there  was  a  solid  con- 
sensus of  public  opinion  which  would  support  him  in  his 
own  conception  of  right,  and  which  caused  him  to  tear 
up  a  message  which  he  had  already  written  on  the  subject 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      93 

to  accompany  the  bill  signed.  I  can  see  him  now  as  he 
picked  up  a  piece  of  paper,  in  relating  this  to  me,  and  said: 
"I  took  up  the  message  which  I  had  written,  approving 
the  bill,  because  I  thought  public  opinion  demanded  it; 
although  I  did  not  believe  it  myself,  I  read  over  what  I 
had  written  and  I  said  to  myself:  'it  is  all  sophistry;  you 
don't  believe  it  yourself,  and  nobody  else  shall  believe  it,' 
and  I  threw  it  in  the  waste  basket."  At  that  meeting,  in 
the  Cooper  Institute,  the  first  speaker  was  your  late  friend, 
whom  many  of  you  remember,  William  Wood,  a  member 
of  your  Bureau  of  Education;  one  who  had  been  active 
in  aU  good  work ;  a  canny  Scotchman.  When  he  began  his 
speech  he  said :  "  My  friends,  there  is  no  boore  equal  to  the 
currency  boore,  and  I  am  one  of  the  worst  boores  of  the 
lot,  and  I  am  going  to  boore  you."  Mr.  Wood  was  mis- 
taken. There  is  a  worse  bore  than  the  currency  bore,  and 
that  is  the  statistical  bore;  I  am  one  of  the  worst  of  that 
lot.  .  .  .  But  Ilong  since  learned  not  to  attempt  to  hold 
an  audience,  no  matter  how  practised  they  might  be  in  fig- 
ures, by  reading  before  them  great  tables  of  figures  and  try- 
ing to  give  them  the  facts  down  to  the  last  fraction  of  a  cent. 
Therefore,  in  any  figures  which  I  may  give  you  to-day,  I 
shall  deal  only  in  the  general  results,  bringing  them  down 
sometimes  to  the  individual,  but  avoiding  what  one  so 
often  witnesses — the  faults  of  the  statistical  bore.  I 
have  not  that  accurate  knowledge  of  Savings  Banks  which 
one  ought  to  have  to  address  such  a  body  as  this;  I  do  not 
even  know,  surely,  where  or  when  the  system  first  origi- 
nated in  this  country,  I  believe  our  old  Provident  Insti- 
tution for  Savings,  in  Boston,  was  the  first;  if  not,  it  was 
one  of  the  first.  From  that  germ  has  been  evolved  our 
system  in  Massachusetts,  which,  as  I  am  informed,  is  in 
some  respects  different  from  your  own.  Massachusetts, 
also,  differs  from  New  York  in  the  proportionate  number 
of  the  inhabitants  possessing  deposits,  although  I  think 
the  average  to  the  credit  of  each  of  your  depositors  is  a 
little  larger  than  ours. 

In  round  figures  one  half  the  inhabitants  of  Massachu- 


94  HISTORY  OF  THE  SAVINGS  BANKS 

setts,  mainly  persons  of  small  or  moderate  means,  pos- 
sess certificates  of  deposit  in  the  Savings  Banks  to  the 
amomit  of  $463,cx)o,ooo;  with  their  reserves  and  cash 
added,  $488,000,000,  at  the  last  report;  probably  to- 
day, $500,000,000 — the  average  to  the  credit  of  each 
depositor,  without  regard  to  their  surplus,  is  $338;  but 
if  my  present  approximate  estimate  is  correct,  the  aver- 
age on  the  whole  population  of  the  State  of  Massachusetts 
is  $200  per  head;  the  number  of  accounts  open  at  the 
present  time  is  considerably  more  than  one  hah  the  entire 
population  of  the  State;  but,  reducing  the  small  number 
who  make  use  of  the  Savings  Banks  by  multiple  deposits 
within  the  limit  of  each  bank  for  the  purposes  of  invest- 
ment, which  is,  I  beUeve,  not  over  one  thousand  dollars 
principal,  there  is  no  reasonable  doubt  that  every  other 
man,  woman,  and  child  in  the  coramonwealth  of  Massachu- 
setts possesses  a  credit  on  the  books  of  our  Savings  Banks 
of  an  average  of  $200.  It  is  rather  singular  that,  ac- 
cording to  the  best  and  closest  estimate  that  I  have  been 
able  to  make  of  the  product  of  this  country,  the  average 
product  of  this  country  annually,  per  capita,  is  somewhere 
between  $200  and  $225  per  head,  or  between  $600  and 
$700  to  each  person  occupied  for  gain.  Now  if  that  be 
true — and  it  is  certainly  no  more,  for  mine  is  the  largest 
estimate  that  any  economist  has  yet  ventured  upon — that 
would  give  an  annual  product  to-day,  approximately,  of 
fifteen  bilHons  of  dollars,  it  follows  that  the  working  people 
of  Massachusetts  have  a  title  to  one  year's  product  a  head 
per  capita  in  the  Savings  Banks  secured  by  a  lien  upon  the 
best  property  in  the  State,  through  its  safe  investment, 
and  I  doubt  if  there  is  any  other  cormnunity  in  the  world 
approaching  that  condition. 

I  am  reminded  of  rather  a  curious  incident.  I  was  in 
the  Senate  gallery,  in  Washington,  at  the  time  the  first 
internal  tax  bill  was  under  discussion,  as  a  representative 
of  the  manufacturers.  The  debate  was  in  progress  in  the 
Senate,  and  a  suggestion  had  come  up  for  taxing  Savings 
Banks.     It  soon  became  evident  that  the  majority  of  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      95 

Senate  had  little  or  no  conception  of  the  functions  of  the 
Savings  Banks  of  the  East.  Even  Senator  Sumner  him- 
self, speaking  against  a  tax  which  would  have  taxed  us  all 
out  of  existence,  did  not  appear  to  have  all  the  data  that 
might  have  been  used.  I  could  not  get  down  on  the  Sen- 
ate floor,  and  I  scratched  off  on  a  sheet  of  paper  a  little 
memorandum  to  him  stating  the  amount  of  the  deposit  as 
it  then  was,  the  number  of  persons  interested,  and  three 
or  four  other  salient  facts.  I  dropped  that  paper  down  to 
a  messenger  who  carried  it  to  Mr.  Sumner  who  immedi- 
ately nodded  to  me  and  incorporated  the  facts  in  his 
speech.  Next  to  me  sat  a  very  rough,  hardy-looking  man 
who  proved  to  be  a  hoosier  from  Indiana.  I  noticed  as  I 
was  writing  that  he  watched  me  very  closely  and  with 
evident  amazement,  and  I  said,  "My  friend,  you  look 
surprised."  "Yes,  I  wondered  what  you  was  doin'." 
Said  I,  "I  merely  told  Mr.  Sumner  that  the  working  peo- 
ple of  Massachusetts  had  $250,000,000  in  the  Savings 
Banks  of  Massachusetts."  "  What  is  that  you  say,  stran- 
ger?" "I  told  Mr.  Sumner  that  the  working  people  of 
Massachusetts,  factory  operatives,  domestic  servants,  and 
the  like,  had  $250,000,000  deposited  in  the  Savings  Banks 
of  Massachusetts."  He  looked  at  me  a  moment  and  ex- 
claimed, "Wal,  stranger,  you  air  a  very  respectable  look- 
ing man  and  I  suppose  I  ought  to  believe  yer,  but  I'll  be 
damned  if  I  do  believe  a  word  you  say ! " 

That  is  the  aspect  which  the  eastern  Savings  Banks  of 
this  country  bear  in  the  minds  of  thousands  of  western  and 
southern  men  to-day.  There  will  be  very  much  greater 
security  to  the  affairs  and  the  finances  of  this  country 
when  the  true  trustee  Savings  Bank  has  carried  its  benefi- 
cent influence  throughout  the  land.  I  have  preached  that 
gospel  over  and  over  again  to  my  southern  friends  in  ad- 
dresses that  I  have  made  down  South.  I  once  made  an 
address  to  the  combined  Boards  of  Trade  of  New  Hamp- 
shire, contrasting  her  position  with  that  of  Massachusetts, 
in  order  to  account  for  our  superior  wealth,  I  took  the 
ground  somewhat  in  joke  that  the  wealth  and  welfare  of  a 


96  HISTORY  OF  THE  SAVINGS  BANKS 

State  would  be  in  inverse  proportion  to  the  possession  of 
any  great  natural  resource,  and,  as  New  Hampshire  had 
a  great  deal  of  natural  scenery  which  enabled  her  people  to 
live  as  they  do  in  Florida,  on  fish  and  strangers  .  .  . 
whUe  we  in  Massachusetts  had  very  little  and  had  to  live 
on  our  own  thrift,  we  had  beaten  her  and  were  better  off 
than  the  people  of  New  Hampshire.  There  is  many  a 
true  word  said  in  jest.  If  you  give  regard  to  the  economic 
history  of  nations,  where  do  you  find  to-day  the  most  pros- 
perous people?  One  of  the  richest  countries  containing 
the  most  prosperous  people,  especially  the  most  prosperous 
farmers  in  all  Europe,  is  Holland,  where  the  people  had 
to  make  the  very  land  on  which  they  raise  their  crops. 
Energy  and  thrift,  developed  by  the  very  necessities  of 
the  case,  have  made  Holland  and  have  made  Massachu- 
setts what  they  are  to-day.  It  is  due  to  that  thrift  that 
our  Savings  Bank  system  is  developed  to  the  extent  to 
which  I  have  spoken. 

Difiiculties  are  now  occurring  in  the  investment  in  these 
great  sums  of  money  which  are  falling  into  the  custody  of 
trustees;  I  therefore  told  IMr.  Rhoades  that  I  should  take 
the  beneficent  function  of  the  Savings  Bank  as  a  lender 
or  distributor  of  the  small  capitals  of  the  people  as  my  sub- 
ject. In  my  judgment,  it  is  even  as  great  and  almost  a 
greater  benefit  than  the  incentive  to  saving.  What  do 
we  do  with  the  capital  of  the  people  of  moderate  means  to 
put  it  into  beneficial  use?  How  do  we  dispose  of  it?  We 
have  no  permanent  national  debt.  It  is  often  proposed 
that  there  shall  be  a  Postal  Savings  Bank.  That  con- 
ception is  based  mainly  on  the  incentive  to  saving,  but  it 
is  utterly  impracticable.  If  the  present  Congress  would 
give  due  regard  to  the  fundamental  and  simple  principle 
of  taxation,  namely,  that  all  taxes  that  the  people  pay  the 
Government  shall  receive,  without  diversion  or  perversion 
to  any  purpose  of  private  gain,  a  simple  and  effective 
system  of  taxation  could  be  as  easily  made  as  one  can  con- 
ceive. It  would  yield  the  entire  revenue  necessary  to  the 
conduct  of  the  Government,  economically  administered, 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      97 

while  at  the  same  time  yielding  a  surplus  that  would  pay 
the  entire  bonded  debt  in  less  than  ten  years  and  the 
entire  demand  debt  in  less  than  ten  years  more.  That 
simple  and  effective  system  which  might  be  to-day  adopted 
would  not  exceed  the  per  capita  rate  which  it  is  now  pro- 
posed to  put  upon  the  business  people  of  this  country — 
for  what  purpose,  aside  from  the  support  of  the  Govern- 
ment? I  leave  to  your  own  conscience  that  question. 
I  am  not  going  into  that  subject.  In  any  event,  there 
ought  not  to  be  for  many  years  longer  any  national  bonds 
for  investment  of  the  postal  savings,  and  if  the  people 
of  this  country  were  to  save  even  one  half  the  average 
savings  of  the  people  of  Massachusetts,  an  investment 
of  that  capital  would  be  needed  to  the  amount  of  over 
$7,000,000,000.  It  is  impossible  to  charge  the  Govern- 
ment of  this  country  with  the  custody  of  savings,  because 
we  have  learned  that  a  national  debt  is  not  a  national 
blessing,  and,  in  the  providence  of  God,  we  do  not  mean  to 
have  one  much  longer.  There  is  not  a  State  in  the  Union 
which,  through  its  natural  resources,  worked  with  the 
intelligence  and  thrift  which  have  been  forced  upon  the 
people  of  Massachusetts — more  than  one  quarter  of  whom 
to-day  are  foreign  born  and  more  than  one  half  of  whom 
to-day  are  either  foreign  born  or  of  foreign  origin  once 
removed — might  not  in  a  few  years  accumulate  a  capital 
in  the  possession  of  its  people  greater  by  far  than  that 
which  the  people  of  Massachusetts  have  scraped  together 
by  their  close  economy  in  all  these  years,  $200  apiece. 
Then  what  shall  we  do  with  our  deposits?  That  is  your 
great  question.  What  are  you  to  do  with  the  pending 
investment,  soon  to  be  increasing?  It  is  a  fact  that  even 
bad  government  cannot  repress  the  progress  of  the  peojjle 
of  this  country.  Bad  methods  of  taxation,  bad  suggestions 
regarding  the  currency,  efforts  to  put  the  quality  of  the 
money  at  the  mercy  of  the  chance  election  of  a  single 
President,  only  retard  progress  but  do  not  stop  it.  Think 
of  it!  As  one  of  your  best  citizens  and  most  sagacious 
men  remarked  to  me  to-day,  when  he  put  the  question  on 


98  HISTORY  OF  THE  SAVINGS  BANKS 

the  continued  existence  of  the  legal  tender  paper  money 
to  one  of  its  chief  supporters,  saying,  *'Are  you  ready  to 
let  the  quality  of  the  money  on  which  all  our  transactions 
depend  and  on  which  all  the  business  of  this  country  rests; 
are  you  yourself  willing  to  leave  it  to  the  chances  of  what 
single  man  shall  happen  to  be  chosen  President  of  the 
United  States?"  The  man  to  whom  he  put  the  question 
replied,  "  I  never  thought  of  that  before."  It  is  time  every- 
body thought  of  that,  for  that  question  develops  the  whole 
danger  on  which  we  have  yet  the  fight  to  go  over  again  to 
maintain  the  honor  and  credit  of  the  nation. 

But  now,  gentlemen,  I  have  exhausted  the  few  sheets  of 
paper  on  which  I  had  made  my  notes.  I  now  come  to 
some  of  the  details.  What  have  we  done  with  our  deposits 
in  Massachusetts?  In  what  manner  have  we  distributed 
the  capital  placed  at  the  disposal  of  the  Savings  Banks? 
I  have  not  had  time  to  examine  the  laws  under  which 
your  investments  are  made.  I  believe  a  wider  scope  has 
been  given  to  the  banks  of  Massachusetts.  That  it  was 
safe  to  give  it  may  be  proved  by  the  fact  that  during  their 
whole  existence  they  have  been  charged  with  the  custody 
of  about  $2,100,000,000,  of  which  at  the  present  time 
nearly $500,000,000  remains  in  their  custody; yet  through- 
out their  whole  period  of  existence  the  entire  loss  to  de- 
positors, by  the  failure  of  Savings  Banks,  or  by  scaling 
down  in  some  instances  their  deposits,  does  not  exceed 
$2,000,000.  Less  than  one  tenth  of  one  per  cent,  in  fifty 
years'  loss  to  depositors  through  any  fault  or  error  or 
fraud  or  mismanagement  of  the  unpaid  trustees  and  of  the 
paid  officers  by  whom  that  trust  has  been  administered. 
This  gives  another  example  of  the  rule  which  I  so  often 
quote  from  Sir  Henry  Sumner  Maine's  Ancient  Law  of 
how  the  development  of  mutual  trust  is  a  comparatively 
modern  conception,  calling  attention  to  the  fact  that  in  the 
Homeric  records  the  cunning  of  Ulysses  and  the  treachery 
of  other  heroes  has  been  commended  as  much  as  the  wis- 
dom of  Nestor  or  the  courage  of  Achilles.  He  says,  sub- 
stantially, as  time  has  gone  on  and  the  work  of  society 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK      99 

has  been  developed,  the  trust  reposed  in  and  deserved  by 
the  many  has  created  the  opportunity  for  fraud  of  the 
few.  Where  there  is  no  mutual  trust  there  can  be  no 
fraud.  Where  the  mutual  trust  of  the  workman  and  the 
capitalist,  the  mutual  trust  of  class  and  class,  and  of  all 
classes  of  the  community,  each  and  the  other  exists,  it 
is  that  very  trust  reposed  in  and  deserved  by  the  many  that 
has  made  the  opportunity  for  the  fraud  of  the  few.  Ac- 
cording to  our  last  Massachusetts  statement  of  the  invest- 
ment of  about  $480,000,000,  our  banks  among  their  assets 
had  $91,000,000  of  loans  on  personal  security.  While  I 
was  a  manufacturer  I  had  very  close  knowledge  of  what 
that  personal  security  consisted  of.  It  has  been  the  prac- 
tice of  our  Savings  Banks  to  lend  money  as  working  capi- 
tal to  the  great  industrial  establishments  of  this  State, 
to  the  factories;  taking  the  greatest  care  both  as  to  the 
credit  of  the  corporation  and  requiring  the  personal  secur- 
ity of  two  or  three  of  its  officers  or  directors.  These  loans 
have  been  justified.  The  Savings  Banks  have  loaned  to 
the  factories  of  Massachusetts  the  working  capital  which 
consisted  in  large  measure  of  the  deposits  of  workingmen 
and  operatives  in  those  very  factories.  A  few  years  ago 
when  I  gave  rather  close  attention  to  this  subject  I  found 
that  the  depositor  in  the  old  Lowell  Savings  Bank,  who 
had  from  year  to  year  placed  his  money  in  that  bank  and 
added  his  accumulations,  had  received  a  better  remunera- 
tion for  his  money  than  he  would  have  received  if  he  had 
owned  shares  in  the  average  factory  stocks  of  Lowell,  it- 
self one  of  the  most  successful  of  the  factory  towns.  The 
average  dividends  of  the  Lowell  companies  throughout 
a  period  of  thirty  years  had  not  paid  as  good  a  return  as 
the  average  earnings  of  money  in  the  old  well-managed 
Lowell  Savings  Bank.  Whether  that  continues  up  to 
date  I  do  not  know,  but  that  was  the  fact  only  a  very  few 
years  ago. 

I  come  now  to  what  I  deem  the  most  important  use  of 
the  deposits  in  the  Savings  Bank.  The  next  item  of  the 
assets  is  $202,000,000  of  Loans  on  Real  Estate.     How  you 


loo  HISTORY  OF  THE  SAVINGS  BANKS 

stand  in  regard  to  that  I  have  not  the  least  idea,  but  two 
fifths  of  our  entire  deposits  are  loaned  on  real  estate.  I 
wrote  in  preparing  for  this  address  to  the  Commissioner 
of  Savings  Banks  and  I  found  that  the  number  of  loans 
on  mortgage  was  a  little  over  seventy- two  thousand ;  that 
gives  only  an  average  of  twenty-eight  hundred  dollars 
to  each  mortgage.  Now,  I  know  that  some  of  those  mort- 
gages on  real  estate  in  the  city  of  Boston  are  pretty  large, 
but  by  so  much  as  they  are  larger  if  they  were  taken  out 
would  the  average  be.  reduced.  I  have  no  means  of  com- 
puting it,  but  I  should  say  that  if  we  took  off  $800  from 
the  $2,800  from  a  relatively  small  number  of  those  mort- 
gages we  should  find  that  over  60,000  homes  had  been 
made  possible  to  the  people  of  Massachusetts  by  the  lend- 
ing of  the  small  savings  of  one  class  to  the  thrifty  men  of 
the  other  class,  to  the  end  that  they  might  establish  them- 
selves in  their  own  dwellings. 

We  all  know — not  one  of  you  would  differ  from  me 
about  it — that  the  man  who  owns  his  own  home  is  the 
safest  man  for  the  community.  He  is  the  man  on  whom 
we  rest,  no  matter  what  may  be  the  waves  of  distrust  or 
of  fallacy  that  may  spread  over  the  country.  When  the 
silver  craze  w^as  spreading  and  we  were  trembling  at  what 
was  to  come,  I  had  made  the  analysis  of  that  wonderful 
report  on  western  farm  mortgages  which  was  in  the  last 
census;  when  I  discovered  that  more  than  seventy  per 
cent,  of  the  farmers  in  the  great  Mississippi  Valley  owned 
their  farms  free  of  any  incumbrance  I  told  my  friends: 
"You  need  not  fear;  that  great  body  of  men — slow  but 
sure — will  be  educated  in  this  campaign,  and  as  they  shall 
vote,  so  will  be  the  safety  of  the  finances  of  this  country." 
That  forecast  has  been  justified,  and  will  be  justified  again 
and  again.  When  I  went  abroad  as  Commissioner  of  the 
Government  to  report  on  bimetallism  in  Europe  I  met 
many  of  the  principal  financial  ministers  and  bankers  of 
Europe.  They  were  all  wondering  how  we  could  have 
had  the  folly  to  load  ourselves  with  the  purchases  of  silver, 
when,  as  they  knew  and  ^''knew,  we  of  all  nations  in  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    loi 

world  held  the  command  over  the  gold  deposits  of  every 
bank  in  Europe,  yet  they  feared  we  were  going  down  in 
that  current.  I  said  to  them:  "Gentlemen,  we  may  go 
once,  twice,  thrice  to  the  ragged  edge  of  danger,  but  never 
shall  we  go  over!  never  may  you  fear  or  hope  that  the 
United  States  will  dissever  their  unit  of  value  from  the 
world's  unit  of  value,  the  weight  of  pure  gold,  which  is 
incorporated  in  the  coin  of  the  nation." 

Now,  gentlemen,  this  idea  of  the  true  function  of  the 
Savings  Bank  to  aid  in  housing  the  people  in  their  own 
homes  is  a  very  far-reaching  one.  Think  of  what  it  means, 
and  of  what  misdirected  efforts  have  been  made  by  the 
people  who  have  wished  to  go  a  little  faster  than  the 
Savings  Bank  will  permit  them.  A  bad  lot  of  endowment 
assessment  associations  was  unfortunately  made  lawful 
in  the  State  of  Massachusetts  a  few  years  ago.  Rogues 
came  in  and  plundered  the  people — plundered  the  poorest 
class  of  those  who  should  have  deposited  in  the  Savings 
Bank  in  a  few  years — of  $7,000,000.  I  had  the  satisfaction 
of  being  one  of  those  who  drove  them  out  of  the  State,  or 
into  bankruptcy,  two  or  three  years  ago.  We  have  also 
cooperative  banks.  They  correspond  somewhat  to  the 
building  societies,  notably  of  Philadelphia.  But  there  is 
an  enormous  field  yet  unoccupied,  analogous  to  that  of  the 
Savings  Bank,  which  might  be  incorporated  to  some  ex- 
tent with  it  in  this  development  of  the  idea  of  housing 
the  people,  inducing  them  not  only  to  save  but  also  to 
spend  their  money  in  the  wisest  manner.  Look  at  Phil- 
adelphia, and  you  see  the  best  housed  people  in  the  world. 
There  is  nearly  one  home  to  every  five  persons  in  Philadel- 
phia. How  has  this  condition  been  brought  about?  Partly 
through  legislation  giving  direction  to  the  forces  of  public 
opinion.  In  the  first  place,  aU  the  taxes  of  Philadelphia 
are  levied  upon  the  real  estate,  upon  franchises,  and  upon 
only  a  few  articles  like  watches  and  silverware  of  personal 
property.  The  attempt  to  reach  invisible  and  intangible 
property,  in  the  form  of  stocks  and  bonds,  by  annual  taxa- 
tion, has  been  given  up;  a  reasonable  succession  tax  on  the 


I02  HISTORY  OF  THE  SAVINGS  BANKS 

assets  of  deceased  persons  has  been  substituted,  which 
works  well.  Philadelphia  had  building  acts  many  years 
ago,  before  the  city  began  to  spread  over  its  great  area, 
which  you  could  not  have  established,  and  which  we  could 
not  in  Boston,  on  account  of  narrow  areas,  but  for  which 
we  must  find  some  substitute.  These  acts  require  that 
for  every  family  in  a  house  in  a  residential  district  there 
should  be  so  much  open  yard.  Terminable  ground  rents 
and  building  societies  also  exist.  It  was  first  made  lawful 
to  sell  land  on  perpetual  ground  rents,  but  that  proved  to 
be  against  the  general  interest  of  society.  Their  present 
act  allows  the  actual  conveyance  of  land  to  the  man  who 
builds  upon  it,  on  consideration  of  a  payment  of  ground 
rent  for  a  term  of  years,  which  the  lessee  may  compound 
at  any  time  by  the  payment  of  a  lump  sum;  occupants 
thus  being  free  from  the  danger  of  foreclosure,  which 
always  comes  at  the  worst  time.  Every  man  is  confident 
that  he  can  retain  his  standing  on  his  own  land.  Through 
the  Building  Society  and  the  exemption  of  machinery  and 
tools  of  production  from  taxation,  many  of  the  principal 
citizens  of  Philadelphia  have  begun  their  lives  as  hand  loom 
weavers,  owning  one  loom  in  their  little  houses,  growing  up 
under  the  simple  and  effective  system  of  taxation,  to  be- 
come the  rich  and  prosperous  men  they  are.  .  .  .  You 
know  many  of  them,  as  I  know  many  of  them.  But 
again,  what  do  they  do  in  Philadelphia  with  their  fran- 
chises? Do  they  give  them  away?  Do  they  allow  men  of 
a  type  of  whom  I  do  not  like  to  speak — men  whose  con- 
ception of  their  own  possession  of  capital  is  only  that  they 
may  get  some  advantage  out  of  their  fellowmen,  so  as  to 
pile  up  more  and  more  of  the  capital  that  they  themselves 
know  not  how  to  use,  to  grab  their  streets  by  corrupting 
legislators  and  getting  possession  of  quasi  or  practical 
monopolies?  I  have  no  words  of  obloquy  that  would 
measure  the  contempt  into  which  that  class  of  men  should 
be  buried  under  the  censure  of  the  people.  The  people 
of  Philadelphia  have  not  given  away  their  franchises  or 
the  control  of  their  streets.     They  have  granted  them  for 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK     103 

use  on  conditions  of  mutual  benefit.  I  believe  the  whole 
paving  system  of  fine  asphalt  has  been  put  down  at  the 
expense  of  the  street  railway  systems  of  Philadelphia, 
yet  the  railroad  companies  find  their  profit  in  doing  it,  and 
they  prosper.  They  prosper  in  the  mutual  benefit  which 
is  the  life  of  all  commerce.  When  I  see  men  of  huge  capi- 
tal corrupting  legislature  and  working  upon  Congress — 
not  directly  corrupting  the  members  themselves  by  ab- 
solute bribery,  but  exerting  such  an  influence  over  them 
that  they  can  hardly  resist  it,  hardly  knowing  where  that 
influence  comes  from,  the  purpose  being  to  get  possession 
of  quasi  monopolies,  or  in  order  to  get  acts  passed  by  which 
they  may,  under  the  guise  of  revenue  measures,  increase 
the  taxes  in  huge  measures  that  the  people  pay,  but  which 
the  Government  does  not  receive — I  do  not  wonder  at  the 
prejudices  that  are  growing  up  among  the  hard-working 
and  industrious  people  who  cannot  master  these  intrica- 
cies. I  tell  you  that  if  we  expect  to  correct  this  evil  we 
must  stamp  out  these  men  who  corrupt  legislatures.  Put 
your  foot  on  the  man  who  would  buy  a  franchise  by  cor- 
ruption and  oppress  the  people  for  his  own  private  profit ! 
Put  the  mark  of  Cain  upon  the  man  that  will  pervert  the 
power  of  taxation  to  purposes  of  private  gain  at  the  cost 
of  the  community! 

Gentlemen,  it  is  singular  that  one  may  go  to  the  "effete 
monarchies"  of  Europe  to  learn  a  lesson  how  to  house 
the  people  of  this  country  in  their  own  homes,  and  yet  I 
have  here  the  evidence  that  they  may  do  that.  Many 
years  ago,  when  what  is  called  the  Australian  system  of 
ballot  was  first  introduced  in  Massachusetts,  my  recollec- 
tion went  back  to  one  of  those  useful  pamphlets,  which  it 
is  the  function  of  the  Cobden  Club  to  circulate  among  its 
members,  on  the  so-called  Torren  system  of  registration 
and  title  to  land  under  certificates  of  title  guaranteed  by 
the  State,  in  place  of  the  registry  of  deeds.  I  sent  for  a 
copy,  and,  having  read  it,  I  sent  for  1,000  copies  for  distri- 
bution. I  wrote  a  popular  article  in  the  Century  magazine 
upon  this  great  reform,  which  is  within  the  scope  of  every 


I04  HISTORY  OF  THE  SAVINGS  BANKS 

State  in  this  country,  tending  again  to  housing  the  people 
with  the  least  cost  and  in  the  simplest  manner  by  a  simple 
change  in  the  mode  of  conveyance.  The  Legislature  of 
Massachusetts  Jias  acted  upon  it,  but  has  not  yet  passed 
the  law.  One  commission,  which  consisted  mainly  of 
conveyancers,  found  it  difficult  to  adjust  the  present 
system  of  conveyance  to  the  new  conditions,  but  it  is  prob- 
able that  this  year  another  commission  of  men,  learned 
in  the  principles  of  law,  with  power  to  consult  technical 
conveyancers,  will  remove  the  obstructions,  and  that  we 
may  soon  enjoy  the  benefit  of  this  system.  A  member  of 
the  Real  Estate  Exchange  of  Illinois  was  present  at  a 
dinner  of  our  Real  Estate  Exchange,  where  I  first  developed 
this  subject.  Chicago,  you  know,  moves  quickly,  and 
this  gentleman  went  home  and  before  we  had  begun  to 
move  in  Massachusetts  he  had  an  act  through  the  Legis- 
lature of  Illinois,  giving  the  option  to  every  county  in  the 
State  to  adopt  this  system.  He  did  it  a  little  too  hurriedly, 
and  there  was  one  slight  constitutional  objection  in  the 
act,  which  the  Legislature  of  the  present  year  has  removed. 
What  is  this  system?  You  or  I  own  a  piece  of  land,  for 
which  we  have  a  registered  deed.  The  title  is  good.  We 
carry  that  registered  deed  to  the  State  conveyancer,  and 
he  finds  that  the  title  is  good.  He  takes  possession  of  all 
the  documents,  holding  them  for  the  protection  of  the 
State;  he  then  registers  the  title,  and  gives  me  a  registry 
certificate  of  that  title,  with  the  guarantee  of  the  State 
behind  it  that  it  is  good.  The  State  has  not  interfered 
with,  or  changed,  any  of  the  customs,  or  laws,  by  which 
an  estate  in  land  is  now  vested  in  an  individual,  subject 
to  the  reserved  rights  of  the  State.  The  State  has  merely 
taken  the  evidence  of  title  over  on  to  the  sovereign  record 
from  which  it  emanated,  and,  finding  it  good,  has  given 
the  owner  a  certificate  that  he  has  a  good  title.  The  owner 
in  possession  of  such  a  certificate  can  borrow  money  on 
it,  pass  it  from  hand  to  hand  in  the  simplest  way  and  with 
almost  as  little  expense  as  is  involved  in  passing  title  to  a 
registered  bond  or  a  registered  share  of  stock.     Think  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    105 

it!  In  Australia,  in  British  Columbia,  in  New  Zealand, 
and  in  many  of  the  British  Colonies  that  system  has  been 
in  force  for  many  years.  In  some  colonies  a  very  small 
fee  for  insurance  is  charged  and  held  by  the  State,  but  the 
fund  has  hardly  ever  been  called  upon.  This  covers  the 
risk  that  the  State  runs  by  assuming  to  give  that  certifi- 
cate. There  might  possibly  have  been  a  flaw  in  the  original 
title.  I  thought  this  system  had  originated  in  Australia, 
but  one  day  I  was  reading  an  English  paper  and  there 
came  to  me  a  review  of  an  English  blue  book  by  a  registrar 
of  titles  which  I  have  before  me.  To  my  utter  surprise 
I  found  that  this  system  had  existed  throughout  central 
Europe  in  all  its  integrity,  corresponding  almost  identi- 
cally to  the  Torrens  or  Australian  system,  which  Sir  Robert 
Torrens  established,  probably  without  knowing  this  him- 
self, from  the  manner  in  which  the  title  to  ships  are  reg- 
istered and  passed,  he  having  been  in  that  service. 

Here  we  have  the  facts  that  throughout  Austria- 
Hungary,  Bohemia,  Saxony,  Prussia,  and  throughout 
nearly  the  whole  of  central  Europe,  a  system  has  been  in 
force  for  more  than  eighty  years  so  practically  identical 
with  the  Australian  system  that  the  difference  is  trifling. 
I  would  suggest  to  any  of  you  that  are  students  of  this 
matter — as  you  may  become  perhaps  if  I  succeed  in  inter- 
esting you — that  you  send  and  get  a  copy  of  this  blue 
book.  It  will  cost  you  only  about  one  shilling  and  seven 
pence.  Address  Eyre  &  Spottswoode,  East  Harding 
Street,  Fleet  Street,  E.  C,  London.  Let  me  call  your 
attention  to  the  advantage  of  the  English  system  of  pub- 
lishing documents.  Here  is  a  most  complete  government 
report,  admirably  arranged  and  printed,  with  all  its  cita- 
tions. The  English  government  does  not  distribute  these 
reports  to  the  public  free,  to  pass  in  most  instances  through 
the  hands  of  a  receiver  into  the  paper  mill  from  which 
they  emanated.  They  charge  a  smaU  fee.  Nobody  goes 
for  a  government  report  in  England  except  a  man  that 
really  has  some  use  for  it  and  will  take  some  pains  to  get 
it.    You  will  find  in  this  work  not  only  a  complete  account 


io6  HISTORY  OF  THE  SAVINGS  BANKS 

of  this  system  of  the  transfer  of  land  by  title,  but  a  com- 
plete explanation  of  the  success  of  the  land  banks  which  are 
potent  instruments  in  central  Europe  for  identifying  the 
interests  of  the  people  with  the  interests  of  the  State.  You 
can  then  comprehend  something  of  the  patriotism,  often 
misdirected,  of  the  Germans  toward  their  fatherland,  when 
you  find  how  the  government,  "effete,  dynastic  mon- 
archy," as  it  may  be,  has  seen  to  it  that  the  ownership  and 
the  possession  of  their  homes  is  assured  to  the  people  at 
the  least  possible  cost.  I  have  always  looked  with  jeal- 
ousy at  the  suggestion  of  land  banks  in  this  country.  A 
land  bank  was  established  in  Massachusetts,  in  1745,  and 
Samuel  Adam's  father  was  one  of  the  chief  promoters. 
The  greatest  prejudices  that  existed  against  the  last  royal 
governor,  Hutchinson,  were  due  to  this  effort  to  wind  up 
the  land  bank  and  to  get  its  creditors  paid,  as  well  as  to 
maintain  the  coin  standard  of  value  in  the  colony  of 
Massachusetts.  He  was  a  Tory,  but  in  spite  of  that  let 
it  be  said  to  his  credit  he  was  a  sound  money,  true  citizen 
of  the  colony,  who  remained  loyal  to  the  King.  Read 
Hosmer's  life.  Let  us  revert  to  the  report:  Here  I  find 
a  record  of  the  cost.  For  instance,  here  is  a  record  of  a 
transfer.  Ten  pounds,  say  $50,  is  a  high  fee,  even  in  large 
matters  and  with  wealthy  clients.  The  reporter  says: 
"  One  of  the  judges  spoke  to  me  complaining  of  a  bill  of  six 
pounds  and  twelve  shillings,  that  he  had  been  charged 
for  professional  help  in  the  purchase  of  real  estate  of  the 
value  of  $20,000."  From  that  down  to  a  few  shilling 
for  the  assignment  of  small  lots  is  all  that  a  man  has  to 
pay,  and  intelligent  men  very  often  go  without  professional 
assistance.  One  man  takes  his  certificate  up  to  the  reg- 
istrar, having  sold  his  property ;  the  purchaser  goes  along 
with  his  money.  The  seller  hands  his  certificate  over  to 
the  registrar,  the  registrar  makes  out  the  new  certificate 
to  the  new  owner,  the  money  is  paid  over  then  and  there. 
There  is  no  expense  except  a  little  fee  to  the  registrar. 
The  cost  seems  almost  ridiculous  compared  to  the  cost  of 
conveying  or  executing  of  first  and  second  mortgages  here. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK       107 

This  system  has  been  applied  to  the  greatest  estates  in 
Bohemia  of  which  the  title  goes  back  to  feudal  times  in 
the  fourteenth  century,  and  from  that  down  to  the  small 
holdings  of  Prussia,  where  Baron  Stein  introduced  his  land 
reforms  and  thus  re-created  Prussia  and  made  her  capable 
of  resisting  the  power  of  Napoleon.  It  exists  in  Wurtem- 
berg  and  Bavaria,  where  the  holdings  are  very  small,  where 
the  land  is  subdivided,  and  there  the  same  system  has  been 
in  force  for  over  eighty  years.  In  short,  I  might  turn  over 
page  after  page  here  and  give  you  illustrations  of  its  value. 
Here  is  one  case  where  the  returns  of  twenty-seven  of  these 
land  banks  out  of  a  very  much  larger  number  are  given,  and 
in  the  course  of  their  history  they  had  loaned  to  farmers 
— for  commercial  banks  avoid  these  loans — £147,000,000 
(over  $700,000,000).  These  banks  now  issue  debentures 
and  get  the  money  as  you  receive  the  deposits  in  the 
Savings  Banks.  They  are  under  supervision  of  the 
government.  They  are  carefully  run,  and  their  debent- 
ures are  the  commonest  forms  of  good  security  offered 
for  sale  in  the  Bourses  of  all  the  great  cities  at  four  and 
a  half  and  five  per  cent.  The  farmers  get  their  money 
at  about  the  regular  market  rates,  subject  to  these  small 
charges,  no  greater  hardly  than  would  be  incurred  in 
transferring  a  share  of  bank  stock.  I  commend  this 
method  and  study  to  you  in  any  far-reaching  view  of  the 
future  function  of  Savings  Banks. 

To  this  I  have  ventured  to  add  a  little  pamphlet  of  my 
own,  which  I  printed  at  the  request  of  the  Real  Estate 
Exchange  before  I  had  got  hold  of  this  matter  of  registry 
of  title,  but  which  fits  into  it  to  a  dot.  I  have  attempted 
to  explain  how  a  man  may  gradually  become  his  landlord, 
taking  up  that  wonderful  system  of  terminable  ground 
rents  of  Philadelphia.  It  occurred  to  me  that  the  title  to 
land  might  pass  from  vendor  to  vendee,  and  lessor  and 
lessee,  under  one  registered  document  which  should  re- 
main in  force  until  all  claims  had  been  liquidated,  such 
claims  to  be  represented  by  rent  certificates.  These 
certificates  would  not  carry  any  promise  or  agreement  to 


io8  HISTORY  OF  THE  SAVINGS  BANKS 

pay  any  lump  sum  at  any  time;  but  suppose  a  piece  of  land 
had  been  sold  for  $1,500  on  six  per  cent,  interest  or  ground 
rent,  there  would  be  fifteen  rent  certificates  at  $6  each 
registered  at  the  trust  company  where  the  title  vested, 
each  of  these  certificates  containing  the  provision  that  the 
lessee  at  any  time  coming  into  possession  of  $100,  and  giv- 
ing due  notice,  could  go  to  that  trust  company  and  deposit 
it  to  the  credit  of  the  holder  of  that  certificate.  He  need 
not  discharge  it,  he  puts  it  away,  for  it  is  just  as  good  secur- 
ity to  him  on  his  own  land  as  it  was  to  the  other  man.  He 
gets,  say,  five  of  these  rent  certificates  into  his  own  posses- 
sion ;  then  comes  one  of  the  periodical  disturbances  of  trade 
at  a  time  when  under  the  ordinary  conditions  he  might  be 
foreclosed.  He  has  not  even  the  money  to  pay  the  rent 
on  the  rest  of  the  rent  certificates,  but  he  has  his  own  five 
rent  certificates  undischarged  of  record,  just  as  good  se- 
curity. He  can  then  go  to  the  trust  company  and  bor- 
row, temporarily,  enough  to  tide  over  the  hard  times;  when 
the  times  change  again  he  takes  up  that  loan;  presently, 
as  he  prospers,  he  takes  up  all  the  rent  certificates,  dis- 
charges the  record,  and,  without  ever  having  incurred  the 
danger  of  being  foreclosed  and  sold  out,  he  has  become 
step  by  step  his  own  landlord. 

Such  is  my  discursive  effort  to  deal  with  this  subject,  of 
the  technical  parts  of  which  I  have  very  little  knowledge, 
but  with  the  grand  future  scope  of  which  it  seems  to  me 
I  have  a  vision  as  clear  as  I  hope  the  vision  of  your  Presi- 
dent was  when  he  believed  I  might  interest  you  for  a  few 
moments. 


CHAPTER  V 

Fifth  Annual  Convention — War  with  Spain — Still  Disordered 
Condition  of  Monetary  System — Questions  Relating  to  the 
Taxation  of  Savings  Bank  Deposits — Committee  of  the 
Association  Sent  to  Washington  to  Prevent  Adverse  Legisla- 
tion— Notable  Address  on  "Sound  Money,"  by  Judge  M.  L. 
Crawford,  of  Dallas,  Texas — Postal  Savings  Banks  Discussed — 
Resolutions  Favoring  Currency  Reform  Legislation — Closer 
Relations  with  Savings  Banks  of  Other  States  Advocated. 

THE  year  1898  is  memorable  for  the  brief  and  deci- 
sive war  with  Spain,  precipitated  by  the  awful 
tragedy  of  the  blowing  up  of  the  battleship  Maine. 
President  John  Harsen  Rhoades,  in  his  opening  address 
at  the  Fifth  Annual  Convention  of  the  Association,  held 
on  May  19th,  made  reference  to  this  fact,  in  addition  to 
touching  upon  other  important  subjects,  such  as  what  per- 
centage of  deposits  should  be  kept  in  cash  or  its  equivalent, 
the  extent  to  which  they  might  be  willing  to  extend  the 
scope  of  investments,  and  other  like  topics  of  ever-present 
interest  to  those  charged  with  the  administration  of  a 
great  trust.  The  session  was  well  attended,  there  being  one 
hundred  and  twenty  present  at  the  opening. 

The  press  had  already  announced  that  the  Savings 
Banks  were  exempt  from  the  proposed  war  revenue  tax, 
owing  in  large  measure  to  the  efforts  of  the  Committee 
that  had  been  appointed  to  confer  with  members  of  Con- 
gress and  the  Finance  Committee  of  the  United  States 
Senate  who  prepared  the  bill. 
In  order  to  obtain  better  results,  the  Secretary,  Wm.  G. 

109 


no  HISTORY  OF  THE  SAVINGS  BANKS 

Conklin,  expressed  the  hope  that  before  another  year  had 
elapsed  every  Savings  Bank  in  the  State  would  have  be- 
come a  member  of  the  Association. 


ADDRESS   OF  PRESIDENT   RHOADES 

President  Rhoades,  in  his  opening  address,  said: 

The  existing  war  has  absorbed  so  much  of  public  atten- 
tion that  people  have  seemed  to  forget  the  dangerous  ele- 
ments in  the  situation  which  still  continue  to  exist  owing 
to  the  disordered  condition  of  our  monetary  system,  and 
it  is  well  to  remember  that  until  the  existing  policy  has 
changed  and  the  Government  adopted  some  plan,  gradu- 
ally retiring  from  the  issuance  of  currency  obligations, 
and  such  currency  issues  are  regulated  to  the  banks  which 
are  the  only  proper  medium  of  issue,  we  cannot  continue 
to  have  permanent  prosperity  or  be  relieved  from  the 
dangers  of  alarm  and  distrust  which  are  sure  to  come  when 
failures  of  crops  or  undue  speculation  have  produced  the 
causes  which  naturally  lead  to  heavy  withdrawals  of 
gold  from  the  Government  depositories.  Therefore  we, 
as  Savings  Bank  officers,  must  be  mindful  of  these  facts, 
and  govern  ourselves  with  caution  and  prudence  in  the 
management  of  the  vast  interests  we  serve. 

It  is  strange  that  the  people  cannot  understand  that 
banking  is  business  just  as  much  as  manufacturing  and 
mining  and  tilling  the  soil,  and  that  all  these  varied  indus- 
tries would  be  helpless  without  the  aid  of  the  banks,  which 
utilize  credit  and  form  the  centre  around  which  revolve 
the  wheels  of  commerce,  and  from  which  commerce  draws 
its  power  to  move;  yet  we  protect  our  manufacturers,  and 
are  always  aiming  to  protect  labor,  while  labor  continues 
to  strike  at  capital,  and  seems  to  have  an  ever-increasing 
hatred  for  all  institutions  which  have  the  handling  of 
money  or  that  which  represents  money,  nor  can  they  seem 
to  understand  that  just  as  their  own  frugal  savings  in 
rivulets  flow  into  the  Savings  Banks  until  they  have  reached 


WILLIAM  G.  CONKLIN 


SECRETARY,  18Q3-I907 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    iii 

the  enormous  volume  of  two  thousand  millions  of  dollars, 
each  little  rivulet  powerless  for  good  in  itself,  yet,  in  the 
aggregate,  forming  a  vast  sum,  lending  itself  to  the  Govern- 
ment, the  city,  the  town,  the  village,  to  the  public  author- 
ity, and  to  the  private  individual,  and  thus  aiding  in  the 
employment  of  labor  and  the  building  up  of  the  prosperity 
of  a  great  nation,  so,  in  like  manner,  do  the  aggregate 
deposits  of  the  people  in  banks  of  issue,  each  small  in  it- 
self and  each  by  itself  of  little  value  to  the  public,  make  up 
the  vast  sum  upon  which  credit  is  based  and  through  which 
the  people  prosper  and  are  given  the  power  to  employ  and 
be  employed. 

Therefore  is  it  of  the  utmost  importance  that  the  bank- 
ing system  of  a  great  nation  should  receive  not  the  con- 
demnation but  the  hearty  support  of  every  citizen,  and 
all  should  unite  in  a  demand  that  it  be  properly  encouraged 
and  protected  by  law  and  placed  upon  a  foundation  which 
will  secure  for  the  people  the  best  of  currency  and  the 
highest  credit  in  the  civilized  world. 

So  far  as  the  eleemosynary  system  of  Savings  Banks  is 
concerned,  I  feel  sure  there  is  no  hostility  to  the  establish- 
ment of  a  Postal  Savings  Bank  system.  Any  system  which 
can  be  wisely  conceived  and  managed,  and  through  which 
the  surplus  earnings  of  the  people  can  be  brought  into  use 
as  a  great  moneyed  force  in  the  community  not  only  tends 
to  thrift  and  economy,  but  adds  a  giant  power  in  develop- 
ing the  resources  of  a  nation,  and  should  by  all  means  be 
encouraged,  provided  it  can  be  done  economically,  wisely, 
and  well. 

It  is  not  often,  gentlemen,  that  your  President  can 
promise  so  many  good  things  in  store  for  you  at  one  of 
your  annual  meetings;  and  here  I  ought  to  close,  but  there 
is  one  subject  to  which  I  have  only  referred  by  name,  and 
yet  a  subject  which  is  so  active  and  all-absorbing  in  the 
public  mind  that  I  cannot  well  pass  it  by.  I  refer  to  the 
existing  war  between  Spain  and  the  United  States;  and 
in  this  connection  it  seems  to  me  proper  to  Isay  that 
which  I  know  you  all  will  endorse,  and  it  is  that,  war 


112  HISTORY  OF  THE  SAVINGS  BANKS 

or  no  war,  the  Savings  Bank  system  of  this  State  is 
so  well  grounded  in  law,  so  carefully  guarded  by  a 
competent  Banking  Department,  and  so  wisely  restricted 
as  to  investment  as  to  make  our  Savings  Banks  the  most 
secure  depository  for  the  moneys  of  the  people  which  can 
be  found  anywhere — a  place  where  they  should  be  depos- 
ited in  times  of  distrust,  and  not  a  place  from  which  they 
should  be  withdrawn.  The  pity  of  it  is  that  the  timid  and 
the  ignorant  cannot  always  be  made  to  understand  that 
this  is  so;  yet  considering  the  excited  condition  of  the  pub- 
lic mind  which  has  existed  for  the  past  sixty  days  it  is 
remarkable  that  there  has  been  so  little  disturbance  of 
Savings  Bank  deposits,  and  that  the  great  mass  of  depos- 
itors have  continued  undisturbed  in  their  confidence  in 
the  Savings  Banks  of  the  country,  notwithstanding  the 
alarm  of  war  and  the  foolish  dread  of  possible  invasion. 

How  much  the  members  of  this  Association  may  differ 
as  to  the  need  or  necessity  for  war  in  the  present  instance 
I  do  not  know,  but  I  can  and  do  say  that  when  the  Govern- 
ment of  our  country  decided  that  war  was  necessary  and 
must  be  entered  upon,  from  that  moment  every  man  ceased 
to  be  a  partisan  and  became  a  patriot,  pledging  at  once 
his  influence,  his  property,  and,  if  need  be,  his  life  to  sus- 
tain the  dignity  and  the  honor  of  his  country.  So,  gentle- 
men, the  officers  and  the  trustees  of  the  Savings  Banks  of 
this  State,  and,  I  may  say,  of  the  entire  country,  pledge 
themselves  to  render  all  possible  assistance  to  the  Govern- 
ment and  to  do  their  full  share  in  maintaining  the  credit  of 
the  nation. 

REPORT   OF   EXECUTIVE   COMMITTEE 

Mr.  Samuel  R.  Rainey,  Chairman  of  the  Executive 
Committee,  made  report  in  which  it  was  said : 

The  past  year  has  been  one  of  more  than  usual  activity 
on  the  part  of  the  Executive  Committee,  principally  on 
account  of  the  questions  relating  to  taxation.  Early  in 
the  year  a  circular  was  sent  from  the  office  of  the  State 


SAMUEL  R.  RAINEY 


CHAIRMAN    EXECUTIVE  COMMITTEE 

i8g7  1900 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK     113 

Tax  Commissioners  calling  the  attention  of  local  asses- 
sors to  an  opinion  emanating  from  the  Attorney-General's 
ofhce  and  signed  by  one  of  the  deputies,  as  follows : 

"In  my  opinion  subdivisions  14  of  section  4  of  the  Tax 
Laws  of  1896  does  not  exempt  depositors  in  Savings  Banks 
from  taxation  on  their  deposits,  but  only  exempts  the 
banks  from  paying  taxes  on  them.  Depositors  can  be 
assessed  upon  their  deposits,  and  examined  by  the  asses- 
sors regarding  them,  the  same  as  other  personal  property." 

A  meeting  of  the  Committee  was  called  at  once,  and  the 
chairman  instructed  to  submit  the  question  of  taxation 
to  an  attorney  and  obtain  a  written  opinion.  Accordingly, 
the  two  following  questions  were  submitted  to  George 
W.  Wickersham,  of  Strong  &  Cadwallader,  of  New  York: 

First — Are  deposits  in  a  Savings  Bank  subject  to  taxa- 
tion against  the  individual  depositor? 

Second — Is  the  surplus  of  a  Savings  Bank  subject  to 
taxation? 

After  careful  consideration  Mr.  Wickersham  gave  an 
opinion,  answering  both  questions  in  the  negative.  A 
circular  covering  these  points  was  promptly  sent  to  all  the 
members  of  the  Association.  A  copy  of  the  opinion  of 
Mr.  Wickersham  in  full,  with  cases  cited,  together  with  all 
information  in  the  possession  of  your  Committee,  was  sent 
to  each  member  of  the  Association  asking  for  it,  making 
the  correspondence  on  the  subject  quite  voluminous. 

In  July  a  circular  was  sent  to  the  Association  in  refer- 
ence to  the  preparation  of  a  test  case  on  taxation,  and  ask- 
ing if  it  was  the  wish  of  the  members  of  the  Association 
that  such  test  case  should  be  brought,  the  cost  of  which 
was  to  be  borne  pro  rata  by  the  Association.  The  answers 
to  this  circular  were  such  that  your  Committee  decided 
that  it  was  not  your  wish  to  have  such  test  suit  made, 
and  the  matter  was  accordingly  dropped.  Several  of  our 
banks,  principally  in  the  southern  part  of  the  State,  were 
placed  on  assessor's  books,  and  an  attempt  made  to  collect 
a  tax  on  surplus.  Some  of  the  banks  applied  to  the  Com- 
mittee for  advice  with  reference  to  such  assessments,  and 


114  HISTORY  OF  THE  SAVINGS  BANKS 

were  advised  that  if  compelled  to  pay  they  should  do  so 
under  strong  protest  in  order  to  reserve  their  right  to  have 
the  tax  refunded  if  the  courts  decided  they  were  illegal. 
As  far  as  the  Committee  is  aware  no  bank  has  paid  such 
tax. 

In  Newburgh  the  assessors  placed  the  Newburgh  Sav- 
ings Bank  on  their  rolls  for  the  full  amount  of  their  sur- 
plus, less  their  Government  bonds  and  real  estate.  A 
writ  of  certiorari  was  obtained  and  the  case  argued  before 
Judge  Hirschburg,  who  in  his  opinion  held  "that  the  as- 
sessment in  question  should  be  vacated  and  set  aside  as 
illegal  and  unauthorized."  The  city  has  appealed  from 
this  decision,  and  the  case  will  be  carried  to  the  Court  of 
Appeals. 

The  question  of  taxation  as  against  individuals  was  also 
brought  before  the  courts,  growing  out  of  an  attempt  of  the 
assessors  of  the  village  of  Fulton  to  assess  certain  of  its 
citizens  for  money  on  deposit  in  Savings  Banks.  The 
claim  was  clearly  made  and  there  was  no  dispute  as  to 
facts,  the  assessors  maintaining  that  such  deposits  were 
subject  to  taxation,  and  that  they  committed  no  error 
in  such  assessment.  The  question  was  thus  submitted 
on  its  merits,  and  the  learned  Judge  held  that  deposits 
were  exempt  from  taxation  under  the  laws  of  the  State  of 
New  York. 

In  view  of  this  decision  the  State  Board  of  Tax  Com- 
missioners have  this  year  instructed  the  local  assessors 
not  to  assess  deposits  in  Savings  Banks  unless  further 
advised. 

Much  has  been  said  of  late  in  regard  to  the  debt  of  New 
York  City.  It  is  not  generally  known  that  the  thrifty 
working  classes,  through  the  Savings  Banks,  are  the  larg- 
est creditors  of  this  metropolis,  carrying  over  forty-six 
per  cent,  of  the  debt,  and  in  volume  amounting  to  over 
$100,000,000.  This  investment,  owing  to  the  vast  amount 
of  taxable  real  estate  represented,  is  absolutely  safe,  and 
beyond  doubt  one  of  the  best  securities  held  by  the  banks; 
yet  the  rights  of  these  people — over  1,800,000  in  number — 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    115 

require  a  prompt  adjustment  of  that  portion  of  the  debt 
assumed  through  the  absorption  of  surrounding  munici- 
palities in  order  that  there  be  as  little  delay  as  possible 
in  the  payment  of  interest  thereon,  for  which  the  greater 
city  is  liable.  It  is  hoped  that  such  decision  will  be  made 
as  soon  as  possible,  and  all  questions  as  to  what  constitutes 
debt  should  be  speedily  settled.  The  credit  of  a  great 
city  is  of  the  first  importance,  and  supposed  doubt  should 
be  removed  at  once.  It  is  earnestly  hoped,  therefore, 
that  whatever  questions  there  may  be  at  issue  with  the 
authorities  in  charge  will  find  ready  solution. 

The  other  was  a  bill  introduced  into  both  houses  permit- 
ting investment  in  first  mortgage  bonds  of  railroads  under 
rigid  restrictions.^  This  bill  was  favored  by  some  of  our 
banks  and  opposed  by  others.  As  originally  drawn,  the  bill 
was  faulty  in  construction,  and  your  Committee,  when  con- 
vinced that  it  was  likely  to  become  a  law,  had  it  amended 
in  some  respects  and  placed  in  better  position  in  the  section 
which  it  proposed  to  amend.  The  bill  became  a  law  April 
13th,  and  the  Secretary  immediately  sent  out  a  circular 
giving  the  correct  text. 

In  reference  to  the  bill  the  Committee  issued  the  follow- 
ing resolution: 

^^ Resolved,  That  the  provisions  of  the  existing  law  regu- 
lating the  surplus  of  Savings  Banks  and  the  dividends  to 
be  paid  are  in  our  judgment  safe  and  proper,  and  should 
not  be  changed." 

It  becomes  more  and  more  apparent  each  year  that  if 
the  almost  perfect  system  governing  Savings  Banks  in  the 
State  of  New  York  is  to  be  maintained  in  its  integrity  it 
will  be  necessary  for  its  friends  to  be  very  zealous  in  guard- 
ing it.  The  Association  should  look  to  the  selection  of 
men  of  intelligence  and  honesty  for  members  of  the  Legis- 
lature, and  when  a  bill  detrimental  to  Savings  Banks  is 
before  that  body,  each  member  should  bring  the  full  weight 
of  his  influence  to  bear  against  it. 


'This  was  the  first  legislative  recognition  of  the  legality  of  railroad  bonds 
IS  Savings  Banks  investments  in  New  York  State. 


ii6  HISTORY  OF  THE  SAVINGS  BANKS 

The  Committee  expressed  its  obligation  to  Senator 
L.  H.  Humphrey,  of  Warsaw,  Wyoming  County,  who  had 
been  for  three  years  Chairman  of  the  Committee  on  Banks. 
He  was  a  warm  friend  of  Savings  Banks,  and  being  thor- 
oughly honest  and  conscientious,  had  frowned  upon  everj' 
attempt  to  amend  the  law  to  the  detriment  of  the  banks. 

TAXATION   OF   DEPOSITS 

The  subject  of  the  taxation  of  Savings  Bank  deposits 
was  one  then  uppermost  in  public  and  private  discussion, 
and  in  view  of  this  fact  the  President  had  invited  general 
discussion.  He  introduced  Mr.  A.  E.  Hart,  of  the  Society 
for  Savings,  of  Hartford,  Conn.,  who  said: 

Mr.  President  and  Gentlemen  of  the  Association:  When 
Mr.  Rhoades  kindly  extended  the  invitation  to  be  present 
here  to-day  I  did  not  understand  that  I  should  be  asked 
to  take  any  part,  but  supposed  I  would  have  a  back  seat, 
and  hear  and  not  be  seen.  But  it  is  a  matter  of  such  vital 
importance  to  all  Savings  Banks  in  New  York  and  New 
England — I  may  say  in  the  East — that  I  think  you  should 
at  least  understand  what  is  being  done  in  Washington. 
We,  in  Connecticut,  have  been  watching  this  thing  for  two 
or  three  years.  This  bill  in  Congress  is  known  as  House 
Bill  io,ioo,  and  it  was  reported  in  the  House  May  2, 
1898.  In  the  first  bill  which  was  reported  the  tax  was, 
you  might  say,  nominal;  we  were  taxed  on  our  gross  re- 
ceipts one  quarter  of  one  per  cent.  That  to  an  institution 
as  large  as  the  one  I  represent,  now  over  twenty  millions, 
amounted  to  something  like  $2,000  a  year.  Of  course  we 
have  got  to  appreciate  that  the  expenses  of  this  war  must 
be  met  by  somebody,  and  $2,000  a  year  for  our  institutions 
was  not  large,  and  for  one  I  was  not  inclined  to  make 
much  objection  to  it.  The  bill  was  started  in  the  House 
and  reported  to  the  Senate,  where  it  now  rests.  A  week 
ago  to-day  an  amendment  was  added,  which  is  a  very 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    117 

serious  matter  to  the  Mutual  Savings  Banks,  and  is  as 
follows : 

"That  every  person,  bank,  association,  company,  or 
corporation  engaged  in  the  business  of  banking  shall  pay 
a  special  excise  tax  which  shall  be  equal  to  one  forty  eighth 
of  one  per  cent,  each  month  upon  the  average  amount 
of  its  deposits  of  money  subject  to  payment  by  check 
or  draft,  or  represented  by  certificates  of  deposit  or 
otherwise,  whether  payable  on  demand  or  at  some  future 
day." 

This  means,  to  a  bank  of  $20,000,000,  a  tax  in  round 
numbers  of  $45,000  a  year — which  is  more  than  we  pay 
to  the  State  of  Connecticut  to-day,  being  one  quarter  of 
one  per  cent.  If  the  bill  passes,  our  taxes  are  doubled, 
and  you  can  very  readily  see  that  it  will  be  a  very  serious 
burden  for  the  banks  to  pay  it.  Take  the  large  banks  and 
it  would  run  up  to  $50,000,  or  $75,000,  or  even  $100,000. 
Take  the  large  city  banks  of  $50,000,000  each,  their  tax 
would  amount  to  $125,000  a  year.  We  thought  it  was  of 
such  vital  importance  that  last  week  three  of  us  went  to 
Washington,  and  we  have  been  in  consultation  with  our 
Congressmen  and  Senators,  and  they  are  going  to  do  all 
they  can  to  help  us  out  in  this  matter;  but  they  say  they 
cannot  do  it  all.  Connecticut  is  a  small  State,  with  only 
six  members  in  all,  and  they  must  have  the  help  of  the 
large  States  like  New  York  and  Massachusetts.  We  re- 
turned last  Tuesday,  and  have  been  in  consultation  with 
the  Massachusetts  people,  and  they  have  already  sent 
a  man  down  and  are  going  to  send  more  this  week.  We 
hope  that  your  Association  here  will  appoint  a  Committee 
to  go  to  Washington  just  as  soon  as  you  can.  This  matter 
will  be  finally  settled  within  a  month,  if  not  sooner,  and 
quick  action  must  be  taken  to  help  us  out  in  the  matter. 
Our  Senators  there  suggest  that  you  send  a  Committee 
there,  and  also  notify  all  banks  in  your  State  and  urge 
them  to  send  letters,  telegrams^any thing;  deluge  them 
with  correspondence  in  regard  to  this  matter.  They  are 
going  to  do  something  in  Massachusetts,  they  have  sent 


ii8  HISTORY  OF  THE  SAVINGS  BANKS 

one  man  already,  and  they  are  going  to  urge  every  Sav- 
ings Bank  treasurer  to  notify  his  Congressmen  and  Sena- 
tors of  the  great  injustice  of  this  proposed  taxation,  and 
see  if  it  cannot  be  headed  off. 

I  do  not  know  that  I  can  add  anything  more.  I  am 
sorry  to  have  taken  your  time.  I  did  not  expect  to  speak 
when  I  came  here.  If  any  one  wishes  to  ask  me  any  ques- 
tions I  will  answer  them  and  state  briefly  all  I  know  in 
regard  to  the  matter. 

Mr.  James  McMahon  said: 

It  seems  to  me  that  it  might  be  desirable,  as  throwing 
light  upon  this  matter,  to  go  back  to  our  Civil  War  and 
notice  how  the  tax  operated  during  those  years.  I  have 
looked  up  the  matter  as  bearing  upon  the  bank  that  I 
represent,  and  I  find  that  in  April,  1865,  we  paid  one 
twenty  fourth  of  one  per  cent,  on  daily  average  deposits 
during  the  month,  adding  surplus  and  deducting  the  hold- 
ings of  United  States  bonds.  In  January,  1867,  we  paid 
semi-annually  one  quarter  of  one  per  cent,  on  the  amount 
of  deposits  held  three  months  previous,  less  deposits  of 
$500,  and  less  average  amount  of  United  States  bonds  held 
during  the  previous  six  months.  That,  at  the  time  re- 
ferred to,  amounted  to  between  $5,000  and  $15,000  semi- 
annually during  the  time  that  the  tax  was  imposed.  One 
year  I  think  it  was  as  high  as  $38,000;  that  was  the  high- 
est. In  June,  1872,  a  semi-annual  tax  of  one  twenty  fourth 
of  one  per  cent,  per  month  on  deposits  for  the  previous  six 
months,  less  average  deposits  of  $2,000  in  the  name  of  one 
person,  and  less  average  of  United  States  bond  holdings 
during  each  month,  which  reduced  it  to  about  $2,000;  and 
in  January,  1880,  by  a  change  in  the  form  of  returns,  we 
paid  no  more  tax,  the  exceptions  being  more  than  that 
amount  subject  to  tax.  It  seems  to  me  that  inasmuch  as 
this  one  quarter  of  one  per  cent,  if  imposed  upon  all  the 
Savings  Banks  of  this  country  would  result  in  raising  but 
about  $5,000,000,  the  Government  might  very  well  collect 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    119 

that  amount  with  a  great  deal  less  friction,  and  more  sim- 
ply, if  it  were  taken  from  some  other  source. 


PROPOSED   TAX   ON  DEPOSITS 

Mr.  John  P.  Townsend  stated  that  he  had  been  re- 
quested to  offer  this  resolution,  which  was  in  line  with  the 
matter  under  discussion : 

Resolved,  That  the  provision  in  the  proposed  amendment 
to  the  revenue  bill  passed  by  the  House  of  Representatives 
and  now  reported  by  the  Finance  Committee  of  the  Sen- 
ate, whereby  it  is  intended  to  enforce  in  the  aggregate  a 
tax  of  one  quarter  of  one  per  cent,  annually  on  deposits 
in  banks  will,  in  case  Savings  Banks  are  to  be  included 
under  its  provisions,  work  a  grievous  wrong  and  impose  too 
heavy  a  burden  upon  the  savings  of  the  people. 

The  laws  now  in  force  properly  restrict  investment  of 
deposits  in  Savings  Banks  to  a  limited  number  of  the  best 
character  of  investment  securities,  which,  owing  to  their 
safety,  return  only  a  low  rate  of  interest  and  are  largely 
made  up  of  Government,  State,  and  Municipal  bonds. 
The  present  rate  of  return  to  the  depositor  is  small,  with 
the  certainty  that  it  will  have  to  be  reduced  stiU  lower, 
while  the  lowering  of  the  rate  of  interest  paid  to  the  depos- 
itor, rendered  necessary  to  cover  the  large  drain  on  earn- 
ings arising  from  the  proposed  tax,  would  seriously  impair 
the  efficiency  of  the  Savings  Bank  system  of  the  country, 
and  tend  to  discourage  thrift  and  the  habit  of  saving  on  the 
part  of  the  people. 

We  call  attention  to  the  fact  that  of  the  Savings  Banks 
in  the  United  States,  those  holding  over  one  thousand  five 
hundred  millions  of  dollars  out  of  a  total  sum  of  two  thou- 
sand millions  of  dollars  so  deposited,  are  purely  eleemosy- 
nary in  their  character,  have  no  capital,  and  the  profits 
all  accrue  to  the  benefit  of  the  depositors,  who  are  largely 
made  up  of  thrifty  working  classes. 

We,  therefore,  respectfully  present  these  facts  to  the 


I20  HISTORY  OF  THE  SAVINGS  BANKS 

members  of  Congress,  and  urge  that  they  be  carefully 
considered,  and  the  Savings  Banks  relieved  from  the  impo- 
sition of  the  proposed  tax. 

Resolved,  That  a  Committee  of  five  be  appointed  to  go  to 
Washington  and  confer  with  members  of  Congress,  in 
committee  or  otherwise,  and  present  to  them  the  objections 
of  this  Association  to  the  proposed  legislation. 

Mr.  Merritt  Trimble :  Mr.  President,  I  do  not  know  that 
there  is  any  difference  of  opinion  in  regard  to  the  pro- 
priety of  these  resolutions,  but  I  would  like  to  call  atten- 
tion to  two  points  that  seem  to  me  very  serious  ones.  One 
is  that  Mr.  McMahon's  statement  refers,  for  most  of  its 
period,  to  the  time  when  banks  were  receiving  from  five  to 
seven  per  cent,  interest  on  their  investment,  and  could 
easily  make  five  per  cent,  dividends,  which  they  cannot 
do  now.  The  other  point  is  that  this  tax  of  one  quarter 
of  one  per  cent,  per  annum  is  a  very  serious  tax  on  the 
earnings  of  these  deposits.  In  this  State  the  average 
deposit  is  about  $425.  In  this  city  it  is  probably  from 
$450  to  $500;  and  they  receive,  most  of  them,  three  and 
one  half  per  cent.  We  pay  four  on  old  investments.  There- 
fore, this  tax,  to  a  large  number  of  people,  who  have  but 
$450  laid  up  against  a  rainy  day,  amounts  to  a  twelve 
and  a  half  per  cent,  income  tax  on  their  savings. 

The  President:  Does  any  gentleman  here  present  re- 
member the  terms  of  the  tax  during  the  war  that  was 
placed  upon  Savings  Bank  deposits?  It  would  be  inter- 
esting to  know  that.  Perhaps  some  gentleman  present 
remembers  it  and  wiU  teU  us.  The  Chair  will  state,  as  an 
impression,  that  the  tax  at  that  time  was  one  half  of  one 
per  cent.,  I  think,  upon  all  accounts,  first,  in  excess  of 
$500,  and  then  the  law  was  amended  so  as  to  make  it 
one  half  of  one  per  cent,  upon  all  accounts  in  excess  of 
$2,000,  less  the  amount  of  United  States  Government 
bonds.  Those  would  be  deducted  now  because  they  are 
exempted  from  taxation. 

Mr.  McMahon:     I  think  the  statement  read  by  me 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    121 

is  an  exact  copy  of  the  law  as  it  existed  during  those 
years. 

Mr.  Hart:  There  are  no  exemptions  in  this  matter. 
This  is  on  our  deposits,  and  there  will  be  no  exemptions 
whatever.     It  is  a  franchise  tax. 

The  President :     Including  Government  bonds? 

Mr.  Hart:  Everything.  I  simply  corrected  you  be- 
cause you  had  evidently  overlooked  it. 

The  President :     I  am  very  glad  you  did. 

Mr.  Hart :  This  bill  provides  for  no  deductions  of  any 
kind. 

The  President:  Will  Mr.  Wooster  say  a  few  words? 
He  was  in  Washington  for  nearly  a  week.  I  have  the 
pleasure,  gentlemen,  of  introducing  to  you  Mr.  Wooster. 

Mr.  Wooster :  Mr.  President  and  Gentlemen :  It  is  cer- 
tainly a  pleasure  to  be  here  with  you  to-day.  There  are 
two  points  in  this  bill  to  which  I  would  like  to  call  atten- 
tion: In  the  first  provision,  under  which  the  bank  pays 
the  license  tax,  there  is  a  special  exemption  to  the  effect 
that  any  Savings  Bank  having  no  capital  stock,  whose 
business  is  confined  to  receiving  deposits  and  loaning  or  in- 
vesting the  same  for  the  benefit  of  its  depositors,  and  which 
does  no  other  business  of  banking,  shall  not  be  subject  to 
this  tax.  It  would  seem  by  this  that  there  was  a  disposition 
to  exempt  Savings  Banks.  This  suggestion  was  made  to  the 
Committee  on  Finance ;  but  it  seems  now  such  was  not  the 
case ;  that  this  tax  is  proposed  on  the  deposits  of  Savings 
Banks  intentionally,  and  I  fear  that,  whUe  at  present  it  is 
apparently  imposed  for  the  sake  of  producing  revenue,  in 
reality  it  will  be  a  permanent  tax.  There  is  a  disposition 
to  place  the  tax  permanently  on  corporations  in  the  East. 
Throughout  this  bUl,  in  all  its  provisions,  you  will  find 
that  the  building  and  loan  associations,  in  three  or  four 
cases,  in  fact  in  every  case  where  the  tax  is  mentioned,  are 
specifically  exempted;  and  while  we  have  justice  on  our 
side,  I  fear  that  it  may  not  be  so  easy  to  procure  the  ex- 
emption as  we  hope.  We  certainly  hope  that  the  matter 
may  be  adjusted.     I  fear  that  it  cannot  be  done  until  it 


122  HISTORY  OF  THE  SAVINGS  BANKS 

comes  into  the  conference.  Mr.  Dingley,  in  the  course  of 
an  interview  with  him,  says  it  is  always  unsafe  to  leave  a 
matter  to  be  adjusted  in  conference.  I  have  nothing 
further  to  say  except  to  assure  you  that  I  am  very  glad 
to  be  here. 

MR.   W.   W.   JACOBS'    SPEECH 

Mr.  W.  W.  Jacobs,  of  Hartford,  Conn.,  said: 

Mr.  President  and  Gentlemen:  I  am  glad  to  come  here 
from  Connecticut  and  meet  this  Association.  This  is 
a  side  which  I  think  is  very  pleasant,  because  it  draws  us 
together.  But  I  look  upon  these  matters  more  in  a  busi- 
ness way:  that  if  we  can  get  acquainted  and  get  assistance 
in  matters  of  legislation,  it  is  of  great  importance  to  us. 
Connecticut  pays  one  quarter  of  one  per  cent,  state  tax ; 
and  the  Savings  Banks,  the  mutual  life  insurance  com- 
panies, and  the  railroads  run  the  State  of  Connecticut. 
It  is  a  good  deal  of  a  burden,  and  we  do  not  want  to  pay 
this  additional  tax,  which  would  make  it  one  half  of  one 
per  cent.  We  have  a  little  more  limit  than  your  people 
in  deposits,  and  for  that  we  are  thankful.  So  far  as  this 
new  legislation  is  concerned,  the  matter  is  not  exactly 
before  the  Finance  Committee  now;  it  is  before  the  Senate, 
and  if  the  Senate  should  pass  this  bill  as  amended,  it  will, 
of  course,  go  back  to  the  House,  but  the  House  will  simply 
not  pass  it,  and  then  a  Committee  of  Conference  will  be 
appointed.  That  Committee  of  Conference  is  likely  to 
be  made  largely  of  the  members  of  the  Finance  Committee. 
We  were  told  in  Washington  that  on  the  part  of  the  Senate 
in  all  probability  the  members  of  that  Committee  would 
be  Senator  Aldrich,  of  Rhode  Island,  who  knows  all  about 
Savings  Banks,  and  possibly  Senator  Allison  and  Senator 
Piatt,  of  Connecticut.  The  first  and  last  are  good  names, 
but  I  am  in  doubt  a  little  about  the  position  of  Senator 
Allison.  He  is  an  extreme  Western  man.  On  the  part 
of  the  House  there  will  probably  be  Governor  Dingley, 
who  is  a  Savings  Bank  man  and  knows  all  about  their 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    123 

operations;  and  there  is  one  matter  in  regard  to  which 
people — I  don't  want  to  use  the  word  ''ignorance,"  but 
it  seems  to  me  the  people  are  not  generally  familiar  with 
it ;  it  is  this :  When  Mr.  Hart  and  Mr.  Wooster  and  myself 
were  in  Washington  and  saw  Governor  Dingley  and  va- 
rious Senators  and  Representatives,  the  question  came  up 
about  the  Savings  Banks  scattered  all  over  the  country. 
This  is  not  a  true  statement;  there  are  no  Savings  Banks 
west  of  the  Mississippi  River,  and  there  are  none  south  of 
the  Ohio,  unless  it  is  a  small  concern  in  West  Virginia. 
There  are  Savings  Banks  in  Maine,  but  they  all  have 
shares,  and  they  are  for  the  benefit  of  the  stockholders. 
Only  fifteen  States  have  mutual  concerns  like  ours.  These 
amount  in  number  to  only  666.  As  to  California,  I  think 
there  may  be  one  up  in  the  northern  part  of  the  State,  and 
a  few  in  Wisconsin.  As  I  said  before,  there  is  a  mistaken 
idea  on  this  matter.  The  Mutual  Savings  Banks  are  in- 
stitutions incident  to  New  England,  New  York,  and  Penn- 
sylvania, with  a  few  in  Ohio;  and  when  you  talk  with 
legislators  they  say  what  is  not  at  all  true.  My  associates 
and  myself  had  a  work  of  education  to  do.  When  we  met 
Senators  and  Representatives  we  were  told  that  we  were 
large  concerns,  making  big  dividends,  and  so  forth.  We 
corrected  them.  We  said  we  represented  mutual  institu- 
tions; and  we  very  soon  brought  them  into  sympathy  with 
us.  Senator  Vest,  of  Missouri,  who  was  deadly  opposed 
to  us  at  the  outset,  afterward  joined  us;  also  Jones,  of 
Arkansas. 

I  think  it  would  be  wise  if  you  would  appoint  a  Commit- 
tee to  go  to  Washington  to  see  the  Senators  and  Repre- 
sentatives. I  have  mentioned  names  that  will  probably 
be  on  the  Conference  Committee.  You  can  do  a  great 
deal  of  good  work. 

COMMITTEE   TO   GO   TO  WASHINGTON 

It  was  resolved  that  a  Committee  be  appointed  to  go  to 
Washington  and  confer  with  members  of  Congress  and 
present  to  them  the  objections  of  the  Association  to  the 


124  HISTORY  OF  THE  SAVINGS  BANKS 

proposed  legislation.  The  Committee  consisted  of  Mr, 
J.  P.  Townsend,  of  New  York,  Chairman;  Mr.  James 
McMahon  and  Mr.  Andrew  Mills,  of  New  York;  Mr. 
Samuel  R.  Rainey,  of  Hudson;  Mr.  Samuel  Hyde,  of 
Syracuse;  Mr.  Rufus  P.  Birdseye,  of  Utica;  Mr.  Harris,  of 
Utica.     (President  Rhoades  ex-officio.) 

It  was  also  resolved  to  request  Bank  Superintendent 
F.  D.  Kilburn  to  accompany  the  Committee  to  Wash- 
ington and  aid  in  endeavoring  to  prevent  the  exorbitant 
taxing  of  Savings  Bank  deposits. 

"sound  money" 

The  President  then  called  upon  Judge  M.  L.  Crawford, 
of  Dallas,  Texas,  who  addressed  the  Convention  on  the 
then  uppermost  topic  of  **  Sound  Money."  The  address 
of  Judge  Crawford  follows : 

When  your  President  was  partial  enough  to  extend  to 
me  an  invitation  to  deliver  an  address  to  your  Association 
our  country  was  at  peace  with  the  world.  The  mutter- 
ings  of  a  conflict  could  be  heard,  but  grim-visaged  war 
was  only  a  probability.  Now  it  is  a  stern  reality.  In 
defence  of  the  nation's  honor  we  are  to-day  engaged  in  a 
conflict  with  a  foreign  foe,  and  our  sons,  from  the  north, 
east,  south,  and  west  are  marching  side  by  side,  wearing 
the  same  uniform,  animated  by  the  same  patriotic  pur- 
pose, and  all,  thank  God,  following  the  flag  of  the  Union, 
with  no  stain  upon  its  sacred  folds,  no  vacant  spot  where 
a  star  should  be.  United  we  are  invincible,  and  armed 
with  the  right  we  may  bid  defiance  to  a  world  in  arms. 

But  it  is  not  of  war  that  I  would  speak  to-day.  There 
are  other  considerations  which  challenge  the  attention  of 
the  country — other  issues  involving  more  than  the  result 
of  the  war — which  must  be  met  and  decided  by  the  Ameri- 
can people. 

The  unsettled  and  disturbed  condition  of  the  financial 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK     125 

system  of  our  country  demands  the  thoughtful  and  pa- 
triotic consideration  of  every  honest  heart,  and  we  must 
approach  the  subject  as  patriots,  animated  solely  by  a 
desire  to  promote  the  welfare  of  all  sections  and  all  per- 
sons in  every  condition  of  life,  and  not  as  partisans,  in- 
fluenced by  considerations  of  party  expediency. 

The  question  to  be  decided  is,  shall  the  country  main- 
tain the  gold  standard,  using  at  the  same  time  as  much 
silver  in  our  currency  as  the  necessities  of  business  and  the 
convenience  of  the  people  require?  (and  not  a  dime  more) 
or  shall  this  Government  adopt  the  free  and  unlimited 
coinage  of  silver  at  the  ratio  of  sixteen  ounces  of  silver  to 
one  ounce  of  gold,  each  dollar  so  coined  to  be  a  legal  tender 
for  all  debts,  public  and  private?  which  means  a  silver 
standard,  silver  monometallism,  and  nothing  else;  and 
the  advocates  of  this  measure  cannot  be  blind  to  the  fact 
that  such  would  be  the  result.  The  only  difference  be- 
tween the  old  greenbacker  and  the  freesilverite  is  in  de- 
gree; both  are  advocates  of  fiat  money.  The  greenbacker 
wants  the  Government  fiat  printed  on  paper,  worth  noth- 
ing, and  which  can  be  carried  in  the  pocket,  while  the  free- 
silverite demands  that  the  fiat  be  stamped  on  pig  metal, 
the  material  for  every  dollar  worth  about  forty  cents,  and 
which  could  only  be  carried  around  in  a  haversack. 

The  issue  thus  squarely  presented  must  be  bravely  met. 
There  must  be  no  evasion,  no  attempt  to  deceive  or  mis- 
lead the  people  by  the  delusion  of  international  bimetal- 
lism, but  the  advocates  of  the  gold  standard  must  stand 
by  and  maintain  it,  because  it  is  demanded  by  common 
honesty;  because  its  maintenance  will  best  subserve  the 
interest  of  every  section  and  of  all  our  people  in  every  con- 
dition of  life ;  because  the  national  honor  demands  it.  It 
is  the  standard  of  civilization  and  progress,  and  as  long  as 
we  propose  to  keep  in  the  van  in  the  onward  march  of 
nations  we  must  maintain  it.  With  the  gold  standard 
we  have  grown  and  prospered  as  no  people  or  nation  ever 
prospered  before.  The  young  giant  of  the  West,  though 
scarcely  out  of  the  cradle,  has  become  the  wonder  and 


126  HISTORY  OF  THE  SAVINGS  BANKS 

admiration  of  the  world.  Looking  to  her  institutions  and 
achievements,  the  oppressed  and  downtrodden  of  every 
kindred  tribe  and  tongue  direct  their  thoughts  in  the  hour 
of  their  despair  to  this  goodly  land,  where  all  men  are 
free  and  equal  and  the  oppressor's  rod  is  broken.  Shall 
we  reverse  our  policy  and  ourselves  become  the  oppressors 
and  despoilers  of  the  poor?  Shall  we  by  legislative  enact- 
ment take  from  our  people  more  than  one  half  of  the  sav- 
ings accumulated  by  unremitting  toil  and  the  practice  of 
the  most  rigid  self-denial?  The  experience  of  our  revolu- 
tionary fathers  with  a  debased  and  worthless  currency 
satisfied  them  that  the  Government  fiat  could  not  make 
money;  that  there  was  a  wide  difference  between  a  dollar 
and  the  promise  to  pay  a  dollar,  and  they  determined  to 
see  to  it  that  the  dollars  of  the  new  republic  were  dollars 
in  fact;  that  the  metal  in  the  dollar  should  be  worth  just 
as  much  as  bullion  as  it  was  worth  as  coin ;  that  the  proc- 
ess of  minting  it  should  be  simply  to  reduce  it  to  conven- 
ient shape  and  attest  its  weight  and  fineness.  In  other 
words,  that  the  commercial  value  of  the  metal  should  be 
the  exact  equivalent  of  the  legal  value  of  the  coin.  No 
other  thought  ever  entered  the  minds  of  the  men  who 
signed  the  Declaration  of  Independence,  who  endured 
the  hardships  and  misery  of  Valley  Forge  and  shared  the 
glories  of  Yorktown.  Having  learned  by  sad  experience 
the  evils  of  a  debased  and  fluctuating  currency,  these 
patriotic  men,  who  shed  their  blood  that  liberty  might  be 
established  upon  the  earth,  gave  to  us  an  example  which, 
if  followed,  will  save  us  from  woes  unnumbered. 

When  the  mint  was  established,  gold  and  silver  were 
both  coined  at  all  the  mints  of  the  principal  European 
nations  at  a  ratio  as  near  the  relative  commercial  value  of 
the  two  metals  as  could  possibly  be  ascertained.  As  there 
had  been  but  little  fluctuation  between  the  commercial 
value  and  the  mint  value  for  a  long  time,  it  was  no  doubt 
believed  that  the  then  established  ratio  would  be  main- 
tained, and  that  the  two  metals  would  circulate  indis- 
criminately; but  the  fact  was  clearly  recognized  that  if 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK     127 

either  metal  was  undervalued  it  would  be  expelled  from 
circulation. 

Ten  years  before  the  mint  was  established  Robert  Mor- 
ris, the  financier  of  the  Revolution,  declared  that  gold  and 
silver  could  only  circulate  as  money  when  the  exact  equiva- 
lent between  the  mint  value  and  the  market  value  of 
the  two  metals  was  preserved.  These  men  understood 
the  Graham  Law ;  they  knew  that  values  were  fixed  by  the 
current  judgment  of  men,  and  not  by  the  fiat  of  govern- 
ment. They  never  dreamed  of  giving  a  value  to  either 
gold  or  silver  by  coining  it  into  money.  It  never  occurred 
to  them  that  it  was  possible  to  take  forty  cents'  worth  of 
pig  metal  and  make  a  dollar  out  of  it  worth  one  hundred 
cents.  That  such  a  thing  could  be  done  seems  to  have 
escaped  the  observation  of  aU  our  public  men  until  about 
1870,  when  Senator  Jones  of  Nevada,  in  a  two  days'  speech, 
announced  it  as  one  of  the  simplest  problems  in  economics. 
In  this  speech,  which  is  the  fountain  from  which  the  free- 
silverites  have  drawn  their  inspiration  ever  since.  Senator 
Jones  displayed  all  the  zeal  of  a  new  convert.  Two  years 
before  its  delivery  both  Senator  Jones  and  his  colleague, 
Senator  Stewart,  were  earnest  and  eloquent  advocates  of 
the  gold  standard.  They  declared  that  gold  was  the 
universal  standard  of  the  world ;  that  we  must  come  to  the 
same  conclusion  that  all  other  people  have — that  gold  is 
recognized  as  the  universal  standard  of  value. 

In  his  first  message  to  Congress  President  Grant  declared 
that  every  obligation  of  the  Government,  unless  otherwise 
expressed  in  the  contract,  must  be  paid  in  gold.  As  late 
as  1874  Senator  Stewart  agreed  with  the  President.  He 
then  advocated  the  conversion  of  the  Treasury  notes  into 
gold  or  five  per  cent,  bonds.  He  wanted  no  paper  money 
not  redeemable  in  gold.  What  influences  then  surrounded 
these  Nestors  of  the  silver  party?  Both  were  largely  in- 
terested in  silver  mining.  Senator  Jones  and  his  business 
partner  owned  five  sixths  of  the  Crown  Point  mine,  the 
output  of  which  was  over  $4,000,000  in  1874.  Silver  was 
then  worth  129  cents  per  ounce — sixteen  to  one.     There 


128  HISTORY  OF  THE  SAVINGS  BANKS 

was  no  reason  why  the  silver  mine  owner  should  oppose 
the  gold  standard  or  favor  fiat  money.  No  wonder  he 
said  in  the  United  States  Senate  in  1874:  "Gold  is  so  an 
exact  measure  of  human  effort  that  when  it  is  exclusively 
used  as  money  it  teaches  the  very  habit  of  honesty."  But 
in  the  concurrent  judgment  of  mankind  silver  was  too 
high;  it  was  not  worth  129  cents  an  ounce,  and  the  price 
rapidly  declined  until  March,  1876,  when  the  market  value 
was  no  per  ounce.  This  decline  in  price  represented  an 
annual  loss  to  the  Crown  Point  of  more  than  $500,000, 
and  to  the  other  silver  mine  owners  of  Nevada  more 
than  $4,000,000  per  annum.  Under  these  circumstances 
Senator  Jones,  in  April,  1876,  made  his  speech  in  the 
Senate,  which  was  the  beginning  of  the  struggle  for 
fiat  money,  which  has  been  so  persistently  maintained 
ever  since. 

The  demand  for  free  silver  did  not  originate  on  the  farm 
or  in  the  workshop;  its  cradle  was  the  Comstock  Lode. 
It  is  the  offspring  of  greed  and  rapacity,  Mr.  Bryan,  in 
his  speech  accepting  the  Chicago  nomination,  truly  said: 
"  So  long  as  human  nature  remains  as  it  is  there  will  always 
be  danger,  more  or  less  restrained  by  public  opinion  or 
legal  enactment,  that  those  who  see  a  pecuniary  profit  to 
themselves  in  certain  conditions  may  yield  to  the  tempta- 
tion to  bring  about  those  conditions."  Mr.  Bryan  must 
have  had  the  silver-producing  States  in  his  mind's  eye. 
So  long  as  the  commercial  value  of  silver  was  equal  to  its 
mint  value  we  heard  nothing  of  free  coinage.  None  then 
were  to  be  found  to  champion  its  cause.  The  sacred  dol- 
lar of  the  daddies  seems  to  have  been  lost  sight  of. 

Prior  to  i860  the  production  of  silver  in  this  country 
was  insignificant;  but  after  that  time  it  rapidly  increased, 
and  by  1873  more  than  188  millions  had  been  dug  from 
the  mines  of  the  United  States,  and  of  this  vast  sum  only 
two  and  a  half  per  cent,  was  coined  into  silver  dollars, 
every  dollar  of  which  was  sold  for  gold.  Some  of  our  men 
in  public  life  who  are  to-day  leading  this  unholy  crusade 
for  fiat  money  were  silver  mine  owners  in  1873.     Why  is  it 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    129 

they  could  not  then  see  that  nothing  but  the  free  coinage 
of  silver  at  sixteen  to  one  would  save  mankind  from  cruci- 
fixion upon  a  cross  of  gold,  preserve  the  liberties  of  the 
people,  and  prevent  our  becoming  vassals  to  the  English 
money-lenders?  The  answer  is  plain.  The  bullion  in  a 
silver  dollar  is  worth  103  cents  in  gold,  and  these  patriots 
were  unwilling  to  lose  the  three  per  cent.  The  mint  was 
open  to  free  coinage  of  silver;  they  refused  to  take  their 
188  millions  to  it  when  silver  was  at  a  small  premium,  and 
they  now  demand  the  right  by  law  to  have  not  only  their 
own  silver,  but  all  the  silver  in  the  world  coined  at  the 
mint  and  the  people  of  this  country  compelled  to  take  it 
at  par  with  gold  when  in  fact  one  gold  dollar  is  worth 
intrinsically  nearly  two  and  a  half  dollars  in  silver  in  all 
the  markets  of  the  world.  In  justification  of  this  mon- 
strous proposition  its  advocates  say  that  the  free  coinage 
of  silver  will  at  once  raise  the  price  of  that  metal  to  129 
cents  an  ounce  and  thus  restore  its  parity  with  gold.  Do 
the  leaders  believe  it?  Are  they  sincere  when  they  make 
this  declaration  to  the  American  people?  I  appeal  to  the 
record.  During  the  campaign  of  1896,  Mr.  Bryan,  in  a 
signed  statement  published  in  the  newspapers,  admitted 
that  free  coinage  at  sixteen  to  one  would  vastly  depreciate 
the  deposits  in  Savings  Banks,  but  claimed  that  depositors 
would  be  more  than  compensated  for  their  loss  by  the 
increased  value  which  free  coinage  would  give  to  their 
other  holdings;  that  the  value  of  life  insurance  policies 
would  be  reduced,  but  that  the  holders  of  the  policies 
would  be  more  than  compensated  by  the  reduction  in  the 
premiums  they  would  have  to  pay. 

Professor  Parsons,  of  the  Boston  University  of  Law,  an 
earnest  advocate  of  free  silver  at  sixteen  to  one,  in  an 
article  published  in  the  Arena,  said  that  the  results  of 
such  a  measure  would  be  the  retirement  of  $500,000,000 
or  $600,000,000  in  gold  from  our  monetary  resources — a 
vast  gift  to  the  owners  of  silver  mines  and  silver  bullion 
here  and  abroad,  the  temporary  scaling  down  of  salaries 
and  wages,  injustice  to  creditors  in  respect  to  all  debts 


I30  HISTORY  OF  THE  SAVINGS  BANKS 

contracted  in  recent  years  under  the  present  standard, 
including  depositors  in  Savings  Banks. 

How  could  depositors  in  Savings  Banks  be  injured 
or  the  value  of  their  deposits  diminished  by  the  free 
coinage  of  silver  if  the  silver  dollars  remained  as  good 
as  gold  dollars?  No  one  but  a  freesilverite  can  tell  the 
reason  why.  Mr.  Bryan's  statement  that  the  increased 
value  of  their  other  holdings  would  more  than  compensate 
the  depositors  for  the  diminished  value  of  their  deposits  is 
a  mockery.  You  gentlemen  know  that  in  nearly  every 
instance  the  little  bank  account  is  the  depositor's  all. 
Look  at  the  Bowery  Savings  Bank  with  its  114,000  depos- 
itors, the  largest  but  $3,200  and  but  two  which  amount  to 
$3,000,  while  the  average  is  but  $512.  What  outside  in- 
vestments have  these  people  which  will  be  benefited  by 
adopting  the  financial  theories  of  the  friends  and  advocates 
of  fiat  money?  It  is  safe  to  say  that  a  proposition  to 
destroy  more  than  one  half  of  the  deposits  in  our  Savings 
Banks,  squarely  submitted  to  the  popular  vote  of  the 
American  people,  would  not  prevail  in  a  single  county  in 
the  Union,  and  yet  the  advocates  of  free  silver  practically 
admit  that  such  would  be  the  effect  of  its  adoption.  Could 
this  Government  lay  the  hand  of  despotism  upon  our 
Savings  Banks  and  take  from  their  coffers  money  enough 
to  pay  the  public  debt,  it  would  be  an  act  of  spoliation  and 
oppression  unparalleled  in  the  history  of  the  world.  Still, 
such  an  act  would  not  inflict  as  great  pecuniary  loss  upon 
the  4,000,000  of  wage-earners,  whose  savings  have  built 
up  and  who  own  the  Savings  Banks,  as  would  the  free 
coinage  of  silver  at  sixteen  to  one.  The  advocates  of  this 
measure,  loaded  down  as  it  is  with  injustice  and  dishonor, 
call  themselves  disciples  of  Jefferson  and  Jackson.  When 
the  mint  was  established,  Mr.  Jefferson,  as  well  as  all  the 
public  men  of  the  time,  recognized  the  necessity  of  main- 
taining the  exact  equivalent  between  the  legal  value  of  the 
coin  and  the  market  value  of  the  metal  from  which  it  was 
made.  General  Jackson  with  his  own  hand  signed  the 
bill  which  restored  to  this  country  the  gold  currency  driven 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    131 

from  our  shores  because  gold  was  worth  more  in  the  market 
than  it  was  at  the  mint.  If  the  old  hero  were  alive  to-day 
you  might  as  well  look  for  him  in  a  secession  convention 
as  in  a  free-silver  caucus. 

These  advocates  of  fiat  money — ^bimetallists  as  they  call 
themselves — tell  the  people  that  the  decline  in  the  price 
of  silver  is  attributable  alone  to  the  ''crime  of  '73,"  and 
that  to  adopt  free  coinage  at  sixteen  to  one  will  at  once 
advance  the  price  to  129  cents  an  ounce  and  restore  the 
parity  between  the  two  metals.  They  simply  make  the 
assertion,  but  fail  to  state  a  single  fact  upon  which  their 
belief  is  predicated.  The  experience  of  all  nations  is 
against  them.  We  have  tried  the  experiment  and  failed. 
No  free  coinage  country  on  the  earth  to-day  uses  gold  in 
its  monetary  system.  AH  free  coinage  countries  are  on  the 
silver  standard.  No  nation  on  earth  has  ever  been  able 
by  free  coinage  of  both  gold  and  silver  at  any  ratio  to 
maintain  the  exact  equivalent  between  the  mint  value 
and  the  commercial  value  of  the  two  metals.  Every  at- 
tempt to  accomplish  this  result  has  failed.  The  metal 
which  is  undervalued  at  the  mint  always  retires  from  cir- 
culation. By  ignoring  the  experience  of  the  past,  these 
latter-day  bimetallists  insist  that  no  problem  in  economics 
is  easier  than  to  bring  about  the  concurrent  circulation 
of  both  gold  and  silver  as  money  of  redemption  at  sixteen 
to  one.  There  can  be  no  doubt  but  that  the  rank  and 
file  of  the  free-silver  advocates  who  have  been  educated 
into  this  belief  by  the  party  leaders  are  honest  in  their 
convictions,  but  it  takes  a  large  stock  of  human  credulity 
to  make  us  believe  that  the  leaders,  when  they  set  at 
defiance  the  experience  of  this  and  all  other  countries 
where  the  experiment  has  been  tried,  are  themselves  sin- 
cere. What  they  fail  to  gather  from  the  experience  of  all 
nations  they  attempt  to  supply  by  organization  and  per- 
sistency. We  have  yielded  too  much  already.  There 
must  be  no  more  compromises.  The  Government  has  lost 
more  money  in  the  purchase  of  the  uncoined  silver  in  the 
treasury  than  would  have  built  and  paid  for  twenty  first- 


132  HISTORY  OF  THE  SAVINGS  BANKS 

class  battleships.  While  the  shouts  of  Admiral  Dewey's 
heroic  crew  were  going  up  from  Manila  announcing  a 
glorious  victory  for  the  American  fleet  and  proclaiming 
a  change  in  the  map  of  the  world,  the  demand  comes  from 
the  freesilverites  in  Congress  to  coin  the  seignorage  and 
issue  one  hundred  and  fifty  millions  in  treasury  notes. 
It  is  to  be  hoped  that  no  such  measure  will  prevail.  We 
have  more  than  enough  demand  obligations  outstanding 
against  the  Government.  We  don't  want  to  fight  this 
war  with  fiat  money.  We  have  got  the  gold  right  here 
in  the  hands  of  our  own  people  to  maintain  our  armies  in 
the  field  and  our  ships  afloat.  Our  people  have  the  pa- 
triotism to  hand  over  to  the  Government  gold  enough  to 
meet  its  every  want.  They  say  that  gold  is  cowardly 
and  hides  before  the  echoes  of  the  first  hostile  gun  have 
died  away.  I  deny  it.  Our  people,  rich  and  poor  alike, 
offer  the  Government  more  than  it  has  need  for.  If  dur- 
ing this  conflict  gold  disappears  it  will  flee  from  vicious 
legislation  and  not  from  Spanish  buUets. 

If  the  advocates  of  free  silver  and  other  forms  of  fiat 
money  could  get  control  of  this  government  they  would 
drive  every  dollar  in  gold  from  our  monetary  system,  but 
hostfle  guns  can  never  do  it. 

The  importance  of  maintaining  our  present  standard  of 
value  cannot  be  overestimated,  and  the  most  serious  evil 
affecting  our  monetary  system  is  its  threatened  degrada- 
tion. The  gold  standard  must  be  preserved,  and  our 
obligations,  public  and  private,  discharged  with  reference 
to  it.  This  question  rises  higher  than  party  considera- 
tions. The  friends  of  honest  money  and  honest  methods 
must  not,  for  the  sake  of  party  regularity,  by  their  votes 
help  fasten  upon  this  country  a  policy  which  their  judg- 
ment tells  them  will  ruin  it.  Mr.  Jefferson  said  that  the 
surrender  of  one's  convictions  upon  great  questions  of 
public  policy  at  the  mere  behest  of  a  political  caucus  was 
the  last  degradation  of  a  free  moral  agent;  that  if  he  could 
not  go  to  heaven  without  going  with  a  party  he  would  not 
go  at  all.     Without  regard  to  past  party  affiliations,  we 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    133 

must  oppose  every  man  who  favors  repudiation  in  any 
manner,  shape,  or  form,  of  either  public  or  private  obliga- 
tions. It  is  just  as  reprehensible  in  morals  for  the  Govern- 
ment to  repudiate  a  part  of  its  debt  by  paying  it  in  a  de- 
preciated currency  as  it  is  to  openly  repudiate  the  whole. 
Whatever  virtues  the  advocates  of  free  silver  may  claim 
for  it,  its  adoption  means  the  repudiation  of  more  than 
one  half  of  every  debt  in  this  country  not  specifically  pay- 
able in  gold,  whether  public  or  private,  and  they  are  bound 
to  know  it.  But  it  will  never  be.  Silver  to-day  occupies 
the  same  relation  to  the  commercial  nations  of  the  earth 
that  slavery  did  to  the  civilized  and  Christian  nations  in 
i860 — supported  by  a  fraction  in  the  United  States  and 
condemned  everywhere  else.  Under  such  circumstances 
its  fate  as  a  money  metal  is  doomed. 

If  we  have  the  courage  of  our  convictions  and  stand  up 
and  make  a  bold  and  manly  fight  for  the  single  gold 
standard,  we  cannot  fail.  My  faith  in  the  virtue  of  the 
American  people  is  unshaken;  they  are  too  brave  to 
be  dishonest.  They  will  never  consent  to  take  from 
the  savings  of  the  poor  man  that  one  thousand  millions 
of  dollars,  nearly  every  dollar  of  which  vast  sum  has 
been  earned  by  the  sweat  of  some  toiler's  face.  They  will 
never  consent  that  the  obligations  of  the  Government, 
created  in  defending  its  life  and  preserving  the  integrity  of 
the  Union,  shall  be  paid  in  a  depreciated  currency,  but 
the  time  will  come  when  the  great  heart  of  the  nation  will 
respond  to  the  noble  sentiment  of  General  Hawley,  ut- 
tered thirty  years  ago:  " Every  obligation  and  every  bond 
of  this  Government  must  be  as  sacred  as  a  soldier's  grave." 

POSTAL   SAVINGS   BANK 

The  following  are  extracts  from  the  address  of  Col. 
Myron  T.  Herrick,  Cleveland,  Ohio,  on  the  subject  of 
"Postal  Savings  Banks." 

Were  we  to  admit  the  truth  of  the  statements  made,  the 
existing  conditions  would  not  warrant  the  establishment 


134  HISTORY  OF  THE  SAVINGS  BANKS 

in  this  countty  of  a  postal  banking  system.  We  have  an 
unexampled  Savings  Bank  system  which  has  been  slowly 
building  on  a  stable  foundation  for  more  than  a  century, 
inspired  by  the  same  unselfish  spirit  of  patriotism  as  ac- 
tuated the  builders  of  the  National  Government,  and  its 
marvelous  growth  and  the  fideHty  with  which  the  savings 
of  the  frugal  and  thrifty  laboring  millions  have  been  cared 
for  are  thus  readily  explained.  It  had  for  its  objective 
the  encouragement  of  thrift  and  independence,  and  in  its 
inception  and  consummation  it  has  had  the  unsolicited, 
gratuitous  services  of  men  of  well-known  ability  and  ex- 
perience. That  this  vast  trust,  aggregating  in  value  more 
than  two  thousand  millions  of  dollars,  has  been  faithfully 
administered,  and  that  the  power  has  been  exercised  by 
these  comparatively  few  men  with  justice  and  even  benevo- 
lence, is  uniformly  admitted.  The  system,  while  not 
perfect,  has  so  broadened  its  scope  and  possibilities  as  to 
adapt  itself  to  the  varied  needs  of  the  people  in  all  sec- 
tions of  the  country\  When  compared  with  the  origin, 
development,  and  government  of  the  Savings  Bank  systems 
of  other  countries,  the  vast  proportions  which  it  has  as- 
sumed lend  to  it  a  peculiar  significance,  indicating  that 
the  benevolent  motives  from  which  it  sprang  resulted  in 
the  building  of  an  enduring  structure  adapted  to  the  need 
of  the  masses. 

Of  our  institutions  for  savings  the  earlier  ones  were 
mutual  and  cooperative  in  character,  having  no  capital 
stock.  Of  this  class  of  banks  there  are  now  some  688  in 
number,  and  their  total  deposits  and  resources  amount,  I 
believe,  to  about  eighty-eight  per  cent,  of  the  deposits  and 
resources  of  all  savings  institutions.  Nearly  or  quite  all 
of  these  earlier  mutual  institutions  are  still  in  operation. 

Naturally  the  first  Savings  Banks  were  established  in 
the  East  near  the  centre  of  population,  travelling  westward 
and  southward  with  the  country's  growth  in  compliance 
with  the  law  of  supply  and  demand,  and  as  the  need  of  such 
new  territory  called  for  such  institutions  they  were  promptly 
organized.     It  is  a  well-known  fact  that  in  newly  settled 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    135 

countries  there  is  practically  no  idle  capital,  earnings 
are  immediately  reemployed,  and  business  is  carried  on 
largely  with  capital  borrowed  in  the  East.  The  borrowing 
side  of  a  bank  in  a  new  country  has  early  an  abnormal 
development,  but  the  savings  or  deposit  side  comes  only 
with  the  accumulation  of  years,  and  cannot  be  forced. 
It  must  be  admitted  that  the  deposits  in  those  banks  could 
not  have  reached  the  vast  proportions  had  not  the  money 
so  deposited  been  immediately  loaned  back  to  the  people, 
thus  becoming  one  of  the  chief  factors  in  the  development 
of  the  country. 

Governmental  supervision  has,  in  the  case  of  national 
banks,  proved  to  be  of  great  value  to  the  people,  the  Gov- 
ernment assuming  no  ownership  in  their  business;  and  it 
would  seem  that  a  similar  poHcy  of  oversight  of  the  savings 
institutions  of  the  country  would  be  of  equal  benefit,  if 
for  no  other  reason  than  to  establish  a  uniform  system  of 
examination  which  is  now  left  to  the  varying  laws  of  the 
different  States. 

I  believe  that,  as  a  rule,  the  banks  throughout  the  coun- 
try have  interposed  little  or  no  opposition  to  these  postal 
savings  schemes.  .  .  .  But  they  cannot  see  how  the  in- 
terests of  their  depositors  can  be  served  by  placing  these  de- 
posits with  the  postmasters  throughout  the  country,  whose 
terms  of  office  are  unstable  and  subject  to  frequent  changes, 
and  who  are  not  generally  appointed  because  of  any  ap- 
titude for  the  banking  business.  The  bankers  cannot  see 
how  these  deposits  would  be  surrounded  with  any  greater 
safeguard  stowed  away  in  the  depository  of  some  crossroad 
postmaster  than  if  they  were  resting  in  the  custody  of  the 
Savings  Banks  in  highly  efficient  burglar-proof  vaults  pro- 
vided especially  for  their  keeping.  Nor  can  the  banker 
from  his  point  of  view  appreciate  the  argument  of  the 
postal  savings  advocate  that  greater  freedom  of  circula- 
tion is  to  be  given  these  funds  by  their  transfer  from  the 
numerous  banks  throughout  the  country  to  the  Govern- 
ment centres,  thus  depriving  the  localities  from  which  the 
deposits  may  be  collected  of  the  present  legitimate  use  of 


136  HISTORY  OF  THE  SAVINGS  BANKS 

these  funds,  John  Doe  is  a  laborer,  and  has  bought  his 
little  home,  giving  therefor  in  part  payment  a  purchase 
money  mortgage  of,  say,  $500,  held  by  a  savings  institu- 
tion. The  moral  and  other  benefits  of  the  postal  system 
have  so  impressed  the  depositors  in  that  institution  as  to 
prevail  upon  them  to  withdraw  their  deposits,  where  they 
have  been  at  interest  for  a  generation,  and  to  redeposit 
that  money  with  the  postmaster  at  a  loss  of  fifty  per  cent, 
in  interest.  To  meet  this  extraordinary  demand  the  bank 
must  call  its  loans.  John  Doe  and  others  are  called  upon 
for  settlement.  He  must  either  pay  or  suffer  his  property 
to  be  sold  in  foreclosure.  In  this  scheme  to  "elevate  the 
moral  tone,  to  create  defenders  of  the  credit  and  stabiUty 
of  the  Government,  to  encourage  thrift  in  remote  parts  of 
the  country,"  does  the  Government  propose  to  protect 
John  Doe,  to  loan  him  the  $500,  taking  to  itself  a  mortgage 
on  his  home,  and  if  Doe  defaults  in  the  payment  of  prin- 
cipal or  interest,  or  if  he  fails  to  pay  his  taxes,  will  the 
Government  foreclose  and  seU  the  property?  and  if  there 
are  no  bidders,  will  it  buy  Doe's  house  and  lot?     .     .     . 

If  there  is  any  one  doctrine  which  has  been  instilled  into 
the  minds  of  the  American  people  for  successive  genera- 
tions, since  the  landing  of  the  Pilgrim  Fathers  to  the  present 
day,  it  is  that  of  personal  liberty  and  independent  control 
of  private  property. 

America  owes  her  greatness  to  her  freedom — an  inde- 
pendence gained  by  hard-fought  battles.  Her  soil  has 
been  enriched  by  the  blood  of  patriots,  from  which  alone 
can  spring  such  institutions.  We  may  be  a  nation  of 
farmers  and  laborers,  of  merchants  and  manufacturers, 
of  shopkeepers  and  money-changers,  with  no  leisure  class, 
yet  we  have  a  national  consciousness  which  is  penetrating 
art  and  literature;  and  from  our  narrower  beginnings  we 
are  ever  rising  to  broader  and  higher  comprehensions  of 
what  constitutes  the  fundamental  doctrines  of  a  free  and 
independent  nation,  and  these  we  are  ever  ready  to  main- 
tain. It  is  hoped  that  this  country  will  move  steadily  on, 
increasing  in  prosperity  and  wealth,  and  that  the  Govern- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    137 

ment  will  carry  to  a  legitimate  conclusion  all  its  great 
policies,  and  particularly  the  one  of  placing  the  currency 
of  the  country  on  a  sound  basis,  permanently  retiring  from 
the  banking  business,  satisfied  to  continue  to  exercise  a 
watchful  care  over  the  business  and  commerce  of  the  coun- 
try, avoiding  the  engaging  in  trade  of  any  kind  whatsoever 
foreign  to  its  purpose. 

ADDRESS    OF    F.    D.    KILBURN,     SUPERINTENDENT    OF    THE 
BANKING   DEPARTMENT 

Superintendent  F.  D.  iCilburn,  addressing  the  Conven- 
tion, said: 

It  is  seldom  that  men  gather  together  to  the  number  that 
are  here  assembled  to-day  who  represent  such  vast  inter- 
ests as  are  represented  by  the  Savings  Banks  Association 
of  this  State,  and  who  represent  those  interests  in  the 
peculiar  way  that  they  are  represented  by  you.  You  come 
here  not  representing  your  own  capital  or  your  own  money, 
nor  the  capital  or  money  of  people  with  whom  you  are 
associated  in  business,  but  you  come  here  as  benefactors 
of  the  great  masses  of  this  State,  representing  the  savings 
of  the  common  people,  having  no  interests  whatever  in 
those  savings  yourselves  except  to  preserve  them  safely 
and  invest  them  safely.  I  do  not  believe  that  any  other 
country  in  the  world,  perhaps,  can  present  a  system  of 
benevolence  so  far  reaching  as  the  Mutual  Savings  Bank 
system  of  this  country  is  recognized  to  be.  The  only 
interest  which  you  have,  in  a  pecuniary  sense,  is  the  mod- 
erate salary — and  I  pronounce  that  word  advisedly — 
which  you  are  paid  for  the  great  services  which  you  per- 
form. I  have  been  charged  by  irresponsible  people  with 
being  in  collusion  with  the  Savings  Bank  people  of  this 
State.  You  have  been  held  up  as  monsters  of  greed  and 
selfishness,  and  I  have  been  pointed  to  as  your  subservient 
tool.  If  I  am  no  worse  as  your  tool  than  I  believe  you  to 
be  in  your  greed  and  selfishness  I  am  content.  As  I  had 
occasion  to  say,  last  year,  and  as  I  would  like  to  repeat 


138  HISTORY  OF  THE  SAVINGS  BANKS 

whenever  the  occasion  seems  to  warrant  it,  I  do  not 
believe  that  there  is  a  class  of  men  doing  more  good 
anywhere  in  this  country  than  the  men  who  govern  our 
Savings  Banks.  The  very  idea  with  which  they  were 
established  was  that  of  benevolence,  not  charity,  because 
they  are  not  charitable  institutions,  and  the  people  who 
deposit  in  our  Savings  Banks  are  not  subjects  of  charity. 
They  are  independent,  law-abiding,  patriotic  citizens  of 
this  vast  commonwealth  of  ours.  But  the  institutions 
are  benevolent,  and  as  such  are  doing  a  great  work,  for 
which  we  have  no  other  machinery,  that  I  know  of,  in  this 
country.  I  was  glad  to  hear  the  suggestion  made  here 
to-day  that  a  Committee  be  appointed  to  go  to  Washington 
for  the  purpose  of  opposing  the  proposed  bill  to  tax  de- 
posits of  Savings  Banks.  Now  I  do  not  believe  that  de- 
positors in  the  Savings  Banks  of  this  State  or  any  other 
State  will  object  to  paying  their  fair  share  of  the  expenses 
of  waging  war  against  Spain  or  any  other  country  with 
which  we  may  have  war;  still,  I  believe  that  it  is  entirely 
wrong  and  uncalled  for  that  they  be  especially  singled  out 
for  the  purpose  of  taxation  for  this  or  any  other  purpose. 

At  the  most,  this  Government  cannot  obtain  more  than 
five  or  six  million  dollars  by  the  proposed  tax  upon  Sav- 
ings Banks.  This  State  would  have  to  pay  perhaps  from 
one  and  three  quarters  to  two  million  dollars  of  that  sum. 
Now  that  is  a  large  amount  to  the  depositors  of  this 
State,  whose  deposits  only  average  about  $430,  and  is  a 
very  small  sum,  a  mere  nothing,  to  this  great,  rich  country 
of  ours;  and  I  believe  that  the  proposition  is  wrong  in 
principle  even,  that  these  deposits  of  the  poor  people  of 
our  country  should  be  called  upon — under  the  prosperity 
which  we  enjoy  and  the  vast  resources  and  the  enormous 
riches  which  we  possess  in  this  country — be  called  upon 
to  pay  anything,  until  the  necessity  arises,  toward  the 
prosecution  of  this  war.  I  tell  you,  gentlemen,  the  people 
who  own  the  deposits  in  our  Savings  Banks  will  do  sufficient 
in  putting  down  this  war  by  the  sinews  they  will  contrib- 
ute to  the  conflict. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK     139 

I  do  not  dare  say  too  much  on  an  occasion  of  this  kind, 
for  fear  I  may  say  something  that  I  may  have  to  take 
back,  because  sometimes,  you  know,  the  Superintendent 
of  Banks  of  this  State  finds  something  that  he  does  not 
exactly  approve  and  that  he  must  criticise,  and  I  do  not 
want  you  to  have  the  opportunity  to  tell  me  that  I  said 
something  else  on  some  occasion  which  rather  commits 
me  perhaps  against  any  other  action,  I  would  like  to  call 
attention  to  two  things  which  are  of  somewhat  minor 
importance,  and  yet  which  give  me  some  concern  and  in- 
convenience as  Superintendent,  and  I  don't  think  I  will 
ever  have  a  better  opportunity  to  say  it  to  so  many  people 
representing  Savings  Banks  as  I  have  here  to-day.  One 
of  the  questions  before  us  is  that  of  dormant  accounts. 
There  is  not  a  uniform  system  in  this  State  among  the 
Savings  Banks  of  making  accounts  dormant.  I  know  of 
one  bank  that  makes  them  dormant  after  eight  years.  I 
know  of  several  that  make  them  dormant  at  twenty  years. 
Now  you  have  no  right  to  make  such  accounts  dormant 
until  twenty- two  years  have  expired;  that  is  the  law,  and 
if  you  make  it  twenty  years  or  eight  years,  or  any  less 
number  of  years  than  twenty-two,  you  have  violated  a 
law,  and  it  becomes  my  duty  to  call  your  attention  to  it. 
Many  of  the  banks  have  by-laws  which  provide  that  ac- 
counts shall  become  dormant  at  the  end  of  twenty  years, 
and  some  of  them  have  a  less  term.  Where  I  find  instances 
of  that  kind  I  try  to  correct  them  and  have  the  by-laws 
amended  and  the  practice  established.  I  wish  you  would 
remember  that,  and  if  any  of  you  are  making  accounts 
dormant  at  a  period  less  than  twenty-two  years,  to  correct 
it  at  once. 

I  cannot  sit  down  without  complimenting  the  Legisla- 
ture of  our  State  upon  the  way  that  it  has  looked  upon  the 
bills  which  you  and  myself  regarded  as  objectionable  and 
which  are  always  introduced  in  the  Legislature  of  this 
State  at  least;  and  I  think  most  of  these  bills  are  intro- 
duced through  ignorance  of  the  system  of  Savings  Banks 
in  this  State.     The  men  who  introduce  them  usually  have 


I40  HISTORY  OF  THE  SAVINGS  BANKS 

no  sinister  motives  behind  them,  but  they  think — I  believe 
they  think — at  least  in  a  majority  of  cases,  that  they  are 
subserving,  or  trying  to  subserve,  some  great  public  de- 
mand when  they  introduce  the  bills  which  they  do;  and 
I  have  found  that  when  you  explain  to  the  ordinary  legis- 
lator the  true  inwardness  of  a  bill,  in  nine  cases  out  of  ten 
you  get  him  with  you.  When  they  see  the  facts  connected 
with  the  bill  and  the  effect  that  it  may  have  upon  the  vast 
interests  which  you  gentlemen  represent,  they  are  gener- 
ally easy  to  convince.'  Your  Executive  Committee  will 
bear  me  out,  generally,  at  least,  in  the  statement  that  I 
make  in  this  direction.  I.  know  this  last  winter  we  had 
very  little  trouble  in  the  main  in  convincing  the  Legislature 
that  certain  bills  which  we  thought  ought  not  to  pass 
should  not  pass. 

RESOLUTIONS   ADOPTED 

The  following  resolution  offered  by  Mr.  Wm.  C.  Sturges, 
President  of  Seaman's  Bank  for  Savings,  and  seconded  by 
Mr.  Bradford  Rhodes,  President  of  the  Union  Savings 
Bank  of  Westchester  Coimty,  was  adopted: 

Resolved,  That  the  welfare  of  the  millions  of  thrifty 
working  people  whose  interests  we  serve  demand  that  the 
currency  of  the  country  shall  be  based  upon  a  standard  of 
gold,  and  be  kept  at  all  times  upon  a  parity  with  gold,  and 
that  in  our  opinion  their  interests  have  suffered  and  con- 
tinue to  suffer  owing  to  the  distrust  caused  through  efforts 
made  to  force  in  circulation  unlimited  coinage  of  silver. 
We  therefore  view  with  satisfaction  the  introduction  into 
the  House  of  Representatives  of  a  Currency  Reform  Bill, 
designed  to  alter  existing  conditions,  and  to  enlarge  and 
readjust  the  powers  of  the  banking  system  now  in  opera- 
tion. This  bill,  in  our  judgment,  should  receive  the 
support  of  all  members  of  Congress,  and  we  respectfully 
urge  that  every  effort  be  made  to  secure  its  enactment 
into  law. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    141 

The  following,  offered  by  Mr.  Bradford  Rhodes,  Presi- 
dent of  the  Union  Bank  of  Westchester  County,  Ma- 
maroneck,  was  adopted  : 

Resolved,  That  we  heartily  endorse  every  earnest  effort 
made  to  increase  facilities  for  the  encouragement  of  thrift 
and  the  habit  of  savings  on  the  part  of  the  people.  We 
believe  that  the  gathering  together  and  the  proper  utili- 
zation of  the  surplus  earnings  of  the  masses  will  add  greatly 
to  the  process  of  development  of  the  resources  of  the 
country  and  to  the  growth  of  a  spirit  of  contentment  on 
the  part  of  the  working  classes.  We  have  faith  in  the 
eleemosynary  system  of  Savings  Banks  now  in  operation 
in  many  of  the  States  of  the  Union,  and  believe  that  in  the 
extension  of  this  system  is  to  be  found  the  true  solution 
of  the  question  at  issue.  We  have  no  hostility  to  the 
principle  involved  in  the  establishment  of  Postal  Savings 
Banks,  but  we  do  not  believe  that  such  a  system  is  adapted 
to  a  republican  form  of  government — the  policy  of  which 
is  to  diminish  rapidly  rather  than  to  increase  its  public 
debt — owing  to  which  there  remains  no  adequate  form  of 
investment  for  the  savings  of  the  people  in  which  the 
Government  can  properly  make  investment.  We  do  not 
believe  that,  under  frequent  changes  of  political  control, 
and  in  sparsely  settled  portions  of  the  country,  the  agents 
employed  to  receive  and  disburse  moneys  would  be  found 
capable  to  satisfactorily  perform  such  task,  and  we  do 
believe  that  the  savings  thus  collected,  which  in  the  ag- 
gregate, and  in  time,  must  reach  a  very  large  sum,  should 
not  be  withdrawn  from  the  sections  where  collected,  but 
should  remain  and  be  properly  used  to  assist  in  the  develop- 
ment of  such  sections,  as  has  been  the  case  under  the 
system  of  Savings  Banks  now  in  operation.  For  these 
reasons  we  are  opposed  to  the  principle  of  Government 
Postal  Savings  Banks  now  being  urged  upon  Congress. 

The  following  resolution,  offered  by  Mr.  John  Harsen 
Rhoades,  President  of  the  Association,  was  adopted: 


142  HISTORY  OF  THE  SAVINGS  BANKS 

Resolved,  That  the  presence  here  of  representatives  of 
leading  Savings  Banks  in  the  State  of  Connecticut  has 
been  a  source  of  great  pleasure  to  us,  and  we  express  the 
hope  that  our  interests,  identical  with  each  other  as  they 
are,  may  lead  to  closer  relations  between  their  banks  and 
our  own,  to  be  extended  until  we  embrace  in  a  common 
brotherhood  the  Savings  Banks  of  the  entire  country. 


CHAPTER  VI 

Sixth  Annual  Convention — Movement  Toward  the  Enlargement 
of  the  Scope  of  Savings  Bank  Investments — Successful  Ef- 
forts to  Eliminate  all  Reference  to  Savings  Banks  in  the  "War 
Revenue  Bill"  as  It  Passed  Congress — Taxation  of  Deposits — 
Lessening  the  Nimiber  of  So-called  "Dormant  Accoimts" — 
Address  of  Superintendent  Kilburn — "The  Relation  of  Sav- 
ings Bank  Deposits  to  General  Business,"  by  Hon.  Charles 
S.  Fairchild — "The  Power  and  Beneficence  of  Capital,"  by 
Prof.  Wm.  G.  Sumner,  of  Yale  University — Special  Meeting 
Called  to  Act  on  the  So-called  "Stranahan  Bill" — Legislative 
Hearing  on  Tax  Bill. 

rl"  opening  the  proceedings  of  the  Sixth  Annual  Con- 
vention of  the  Association,  held  at  32  Nassau  Street, 
New  York,  on  Wednesday,  May  10,  1899,  President 
John  Harsen  Rhoades  said,  among  other  things: 

Gentlemen:  By  your  kindness  and  courtesy  elected 
your  presiding  ofl&cer,  it  is  with  a  feeling  of  sincere  pleas- 
ure that  I  welcome  you  once  again  to  the  annual  meeting 
of  our  Association  and  to  the  hospitalities  in  which  we 
here  all  share. 

When  I  think  of  the  many  years  which  the  officers  of 
Savings  Banks  in  this  State  have  allowed  to  pass  without 
affording  an  opportunity  to  know  one  another  better,  and 
to  consult  with  one  another  upon  questions  of  vital  im- 
portance to  the  welfare  of  the  cause  we  serve,  I  hold  all 
the  more  precious  the  years  that  remain  to  each  of  us,  and 
look  forward  to  these  recurring  meetings  somewhat  as  old 
friends  do  with  one  another  in  the  joy  of  the  oncoming 
after  a  long  separation.  The  work  of  the  Association, 
devolving  as  it  does  largely  upon  your  Executive  Commit- 
tee, renders  it  difficult  to  realize  how  much  has  been  done, 


144  HISTORY  OF  THE  SAVINGS  BANKS 

and  that  this  Association  is  in  reality  an  active,  forceful, 
and  valuable  agent  in  fostering  the  best  interests  of  our 
depositors,  and  yet  the  fact  remains  that  were  it  not  for 
our  united  effort  we  would  quickly  find  that  the  Savings 
Rank  system  in  this  State  was  being  undermined  by  bad 
laws,  corruptly  or  ignorantly  created,  and  we  would  fail  to 
secure  the  passage  of  good  laws  needed  to  strengthen  and 
extend  the  beneficent  influence  of  these  great  eleemosynary 
institutions. 

The  report  of  your  Executive  Committee  wiU  give  you 
the  skeleton  of  the  work  done  during  the  past  year;  but 
it  cannot  give  you  the  details,  or  count  the  days  and  hours 
given  to  accomplish  what  is  thus  outlined;  and  for  this 
reason  I  cannot  allow  this  opportunity  to  pass  without 
telling  you  how  much  we  are  indebted  to  Mr.  Rainey, 
Chairman  of  your  Executive  Committee,  for  his  share  in 
this  work.  Watchful,  earnest,  intelligent,  and  faithful, 
your  officers  have  leaned  on  him  for  counsel  and  direction, 
and  have  recognized  that  largely  to  his  effort  is  due  what- 
ever of  success  has  crowned  our  efforts  during  the  past 
year. 

In  the  annual  report  of  the  Comptroller  of  the  State, 
in  giving  a  statement  of  the  debt  of  the  municipalities, 
he  called  attention  to  the  fact  that  he  had  been  unable  to 
secure  reliable  data  as  to  such  indebtedness,  and  had  been 
compelled  to  rely  largely  upon  statistics,  given  to  him 
second  hand,  for  the  correctness  of  which  he  could  not 
vouch.  He  found  from  the  returns  as  made  by  officers  of 
the  municipalities,  and  the  figures  collated  elsewhere,  that 
the  municipal  debt  of  the  State  amounted  to  four  hundred 
and  twelve  millions  of  dollars.  In  view  of  the  fact  that 
the  Savings  Banks  are  carrying  one  hundred  and  eighty- 
one  millions  of  dollars  of  this  debt,  it  seemed  to  me  a 
matter  of  vital  importance  to  our  interests  that  such  a 
condition  of  ignorance  as  to  the  municipal  indebtedness 
of  the  State  should  in  some  way  be  remedied,  and  that 
this  Association  should  lend  its  efforts  to  secure  such  addi- 
tional legislative  action  as  is  requisite  to  regularly  supply 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    14S 

this  needed  information — for  it  is  needed,  both  as  a  guide 
in  making  investment  in  these  securities,  and  as  a  check 
to  extravagance  on  the  part  of  the  municipalities  them- 
selves. To  this  end  I  called  the  attention  of  the  Super- 
intendent of  the  Banking  Department  to  the  statement 
made  by  the  Comptroller,  and  sought  his  aid  in  obtaining 
such  information  as  was  available  for  comparison.  Mr. 
Kilburn  at  once  saw  the  importance  of  the  subject,  and 
immediately  undertook  the  work  of  analyzing  that  portion 
of  such  debt  carried  by  the  Savings  Banks.  Comparing 
these  figures  with  those  collated  by  the  Comptroller,  they 
show  some  facts  which  go  to  prove  the  absolute  need  of 
the  reform  suggested;  but,  in  giving  these  conclusions,  it 
must  be  borne  in  mind  the  Comptroller  has  stated  clearly 
that  his  figures  are  based  only  upon  the  best  knowledge 
he  could  obtain,  and,  therefore,  that  they  could  not  pos- 
sibly be  correct  in  every  instance.  Comparing,  then,  the 
amount  of  debt  for  each  municipality  as  given  in  his  state- 
ment with  that  carried  by  the  Savings  Banks,  and  basing 
the  per  capita  indebtedness  of  each  municipality  referred 
to  upon  the  population  as  given  in  the  census  of  1890,  these 
facts  appear: 

The  banks  are  carrying  the  bonds  of  206  towns  and  vil- 
lages to  the  extent  of  about  five  and  one  half  millions  of 
dollars,  the  indebtedness  of  which  is  not  reported  at  all 
by  the  Comptroller.  They  are  carrying  either  the  entire 
debt,  or  within  fifteen  per  cent,  of  the  entire  debt,  of  219 
cities,  towns,  counties,  and  villages  in  the  State.  There 
are  thirty-two  municipalities  in  which  the  banks  are  carry- 
ing more  bonds  in  amount  than  the  entire  debt  of  each 
as  reported  by  the  Comptroller.  Now  as  to  the  question 
of  the  per  capita  indebtedness  of  some  of  these  muni- 
cipalities. 

Leaving  out  the  smaller  municipalities  included  in  the 
Greater  New  York,  and  also  quite  a  number  of  which,  for 
lack  of  knowledge  as  to  debt,  I  have  been  unable  to  make 
comparison,  I  find  that  there  are  at  least  sixteen  having  a 
per  capita  indebtedness  of  between  $50  and  $60;  eight 


146  HISTORY  OF  THE  SAVINGS  BANKS 

$60  to  $70;  three  $70  to  $80;  five  $80  to  $90;  one  $90  to 
$100;  one  $100  to  $110;  one  $110  to  $120;  three  $130  to 
$140;  one  $150  to  $160,  and  two  $210  to  $220. 

This  examination  also  shows  some  interesting  figures 
as  to  the  debt  of  some  of  the  smaller  municipalities  em- 
braced in  the  city  now  called  the  Greater  New  York,  and 
it  may  be  well  to  give  these  figures  as  going  to  show  the 
enormous  volume  of  per  capita  indebtedness  on  the  part 
of  some  of  these  small  municipalities,  a  large  proportion  of 
which  was  created  just  prior  to  consolidation.  These 
figures  are  as  follows:  Four  have  a  per  capita  indebted- 
ness of  $60  to  $70;  one  $80  to  $90;  one  $100  to  $110;  three 
$120  to  $130;  one  $130  to  $140;  one  $180  to $190;  two  $220 
to  $230;  one  $260  to  $270,  and  one  over  $500.  And  noth- 
ing could  have  saved  some  of  these  towns  and  villages  from 
bankruptcy  but  the  fact  that  the  burden  of  debt  is  now 
being  borne  by  the  city  at  large.  Leaving  out  the  City  of 
New  York  and  a  few  large  cities  through  the  State,  a 
few  moments'  consideration  only  is  needed  to  convince 
any  prudent  investor  that  a  per  capita  municipal  indebt- 
edness of  $60  to  $220  is  altogether  too  heavy  a  burden  to 
carry,  especially  for  towns  or  small  villages.  Think  for  a 
moment  of  a  municipal  debt  of  $160  upon  each  man,  woman, 
and  child  within  the  precincts  of  a  small  community 
like  a  village.  If  the  figures  upon  which  these  estimates 
were  based  were  thoroughly  reliable,  we  might  well  feel 
anxious  over  the  situation.  There  is,  however,  enough 
truth  in  the  statement  made  to  demand  not  only  our  at- 
tention but  that  of  the  public,  to  the  end  that  better 
knowledge  of  the  municipal  indebtedness  of  this  State 
may  be  at  all  times  obtainable. 

This  is  a  debt-creating  era  in  the  history  of  our  country, 
and  the  growth  of  municipal  indebtedness,  not  only 
in  this  State  but  all  over  the  land,  should  be  carefuUy 
watched. 

And  what  is  the  remedy?  There  ought  to  be  some  de- 
partment of  the  State  (and  that  of  the  Comptroller  is  the 
proper  department)  to  which  should  be  sent  annually  a 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    147 

sworn  statement,  signed  by  the  proper  officials  of  each 
municipality,  giving  the  exact  condition  of  the  indebted- 
ness of  each,  and  the  amount  applicable  as  a  sinking  fund; 
and  a  failure  to  make  such  an  annual  statement  should 
constitute  a  misdemeanor.  In  addition  to  this,  in  view  of 
the  laxity  and  want  of  method  in  keeping  the  accounts  of 
many  of  the  municipalities,  especially  those  constituting 
a  small  population,  which  laxity  and  want  of  method  have 
been  repeatedly  shown  when  investigations  have  been 
made  by  those  purchasing  bonds,  and  which,  I  think,  has 
been  pubKcly  stated  by  the  Comptroller  of  the  City  of 
New  York  in  connection  with  his  effort  to  arrive  at  the 
debts  of  some  of  the  smaller  municipalities  now  embraced 
in  the  Greater  New  York,  there  should  be  some  uniform 
system  of  bookkeeping,  so  far  as  the  general  basis  is  con- 
cerned, which  should  be  required  and  enforced  throughout 
the  State.  We  must  bear  in  mind  that  the  Savings 
Banks,  as  I  have  already  said,  are  carrying  one  hundred 
and  eighty-one  millions  of  the  municipal  debt  of  the  State, 
and  that  the  moneys  in  our  charge  are  largely  made  of  the 
savings  of  the  masses  in  our  population.  If  these  thrifty 
workers,  through  our  hands,  become  the  greatest  loaners 
to  our  municipal  departments,  and  thus  contribute  so 
largely  to  the  welfare  of  the  public  as  they  do,  then  they 
have  a  right  to  demand  at  the  hands  of  the  Legislature 
such  protection  as  will  enable  those  who  act  for  them  to  be 
advised  in  detail  at  all  times  of  the  condition  of  the  muni- 
cipal debt  of  each  municipality. 

During  the  past  session  of  the  Legislature  a  bill  has 
been  passed  enlarging  the  scope  of  investment  of  the  funds 
in  our  charge.  This  measure,  after  careful  consideration, 
was  approved  by  your  Executive  Committee.  The  need 
for  an  enlarged  scope  of  investment  is  keenly  felt.  The 
municipal  bonds  of  our  large  cities  are  being  absorbed  in 
all  directions,  both  within  and  without  the  State,  and  the 
demand  has  extended  throughout  the  Middle  West,  and 
even  beyond  that,  while  the  exemption  from  liability  to 
taxation  embodied  in  the  bonds  of  New  York  City  and 


148  HISTORY  OF  THE  SAVINGS  BANKS 

elsewhere  has  opened  up  a  new  and  large  competition 
both  from  individuals  and  corporations.  The  demand  for 
loans  secured  by  mortgage  on  real  estate  has  increased  so 
largely  as  to  exceed  the  supply  throughout  the  farming 
districts,  and  moneys  from  the  interior  have  been  sent  for 
investment  in  loans  on  real  estate  in  all  the  larger  cities; 
while  in  view  of  the  high  price  for  the  securities  of  the 
general  government  the  banks  have  found  it  extremely 
difficult  to  obtain  such  securities  as  are  quickly  avail- 
able in  periods  of  mercantile  depression  and  consequent 
sudden  drain  for  deposits;  for  it  must  be  borne  in  mind 
that  our  deposits  are  at  all  times  subject  to  payment 
on  demand,  and  in  consequence  our  available  resources, 
quickly  convertible  into  cash,  should  be  ample  at  all 
times. 

For  these  reasons  (and  many  more  might  be  given)  it 
seemed  wise  and  expedient  that  your  Executive  Commit- 
tee should  favor  a  proper  bill  widening  the  scope  of  in- 
vestment; but,  in  doing  this,  we  are  well  aware  of  the 
importance  and  the  necessity  of  preventing  the  admission 
of  securities  not  regarded  as  of  the  first  quality,  both  in 
credit  and  security,  and  of  opposing  with  all  the  powers  we 
possess  any  and  all  efforts  to  force  upon  the  banks  more 
securities  than  prudence,  safety,  and  the  needs  of  the  hour 
demand.  Against  this  tendency  we  must  all  stand  as  firm 
as  a  rock. 

And  now,  gentlemen,  I  have  spoken  too  long  and  said 
too  much.  Permit  me,  however,  in  closing,  to  add  a  word 
about  yourselves :  Let  us  remember  that  the  Savings  Bank 
in  its  essence  and  purity  was  founded  as  a  means  to  lessen 
pauperism  and  as  incentive  to  thrift.  Let  us  not  forget 
that  it  rests  upon  foundations  born  of  philanthropy. 
No  selfishness,  no  greed,  no  profit  to  ourselves  must 
be  the  motto  which  marks  our  administration  of  this 
great  and  solemn  trust.  Our  trustees  are  chosen  from 
those  who  are  willing  to  serve  the  public  for  the  pub- 
lic's good  and  for  no  other  purpose,  and  the  well-doing 
of  the  charge  we  have  assumed  is  the  only  reward  we 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    149 

can  expect  to  receive  and  the  only  reward  we  should  wish 
to  receive. 

WTien  I  think  of  the  work  we  are  doing — how,  through 
our  effort,  we  cause  joy  to  dwell  in  the  homes  of  the  poor 
and  sorrow  to  rest  less  heavily  upon  those  to  whom  it  must 
and  will  come — when  I  realize  how,  through  our  efforts, 
we  are  encouraging  thrift,  lessening  poverty  and  pauper- 
ism, and,  by  the  free  will  of  the  humble  toiler,  gathering 
together  his  little  capital  until,  by  the  combined  force  of 
partnership,  he  becomes  a  great  power  of  wealth  through- 
out the  land;  wealth,  the  purest  and  best  in  quality,  blessed 
at  its  birth  as  it  is  by  the  sweat  which  comes  from  honest 
toil,  and  then  giving  it  out  in  great  volume  to  help  create, 
build  up,  extend,  and  render  more  secure  the  grand  com- 
monwealth we  call  by  the  dear  name  of  country — when  I 
think  of  these  things  I  realize  that  we  are  in  truth  doing 
something  for  our  fellowmen  that  is  well  worth  the  doing, 
and  that  in  the  serving  we  have  a  reward  more  precious 
than  gold  or  silver  in  the  consciousness  that  we  are  help- 
ing uplift  the  race  upon  a  higher,  a  better,  and  a  nobler 
plane. 

Let  us,  therefore,  work  not  for  the  day,  but  for  the  mor- 
row, remembering  that  what  we  build  we  build  both  for 
the  day  and  the  morrow.  It  is  in  this  spirit  and  with  this 
aim  in  view  that  our  work  should  go  on,  and  unless  we  do 
this  work  unselfishly,  without  profit  to  ourselves,  and  in 
the  pure  spirit  of  philanthropy  in  which  such  work  was 
created,  we  will  sow  the  seeds  of  distrust  among  the  peo- 
ple, and  eventually  the  system  itself  will  break  down. 

They  are  alone  for  the  working  classes,  and  for  those 
incompetent,  through  experience,  to  care  for  their  savings 
themselves.  The  thrifty  workers,  the  widow,  and  the 
orphan  are  alone  entitled  to  the  privileges  and  benefits  here 
granted.  The  State  has  wisely  exempted  these  deposits 
from  taxation,  and  we  must  see  to  it  that  we  do  not  allow 
those  able  and  competent  to  take  care  of  their  own  moneys 
to  use  the  banks  as  a  refuge  for  the  purpose  of  avoiding 
liability  to  personal  taxation.     Unless  we  do  this,  the 


I50  HISTORY  OF  THE  SAVINGS  BANKS 

time  will  surel}'  come  when  the  burden  of  taxation  will 
also  be  laid  upon  the  banks,  with  the  sure  result  of  causing 
the  withdrawal  of  the  moneys  deposited  by  those  who  have 
no  moral  right  to  use  the  banks,  and  leaving  the  burden 
to  be  borne  by  those  the  least  able  to  bear  it.  Such  has 
been  the  experience  in  all  efforts  to  enforce  personal  taxa- 
tion at  large,  and  the  same  result  must  and  will  follow  any 
attempt  to  tax  the  small  savings  of  the  poor. 

The  Savings  Bank  in  its  various  forms  has  thus  far 
proved  to  have  been  one  of  the  greatest  agencies  at  work 
in  the  civilized  world  to  improve  the  condition  of  the  labor- 
ing classes  and  make  available  their  small  savings  for  the 
purpose  of  creating  wealth,  by  which  the  State  and  the 
Nation  are  greatly  benefited.  Therefore,  let  us  see  to  it 
that,  so  far  as  the  great  State  of  New  York  is  concerned, 
we  will  do  our  own  share  in  strengthening  and  maintain- 
ing in  all  its  purity  this  great  agency  for  good  of  which 
we  are  the  directors,  and  the  development  of  which  marks 
an  era  of  advanced  civilization  and  of  higher  conception 
of  what  man  owes  to  his  brother  man. 


REPORT   OF   EXECUTIVE   COMMITTEE 

Extracts  from  the  report  of  the  Executive  Committee 
follow : 

At  our  last  annual  meeting  a  Committee  was  appointed 
to  visit  Washington  and  urge  upon  Senators  and  Congress- 
men the  injustice  of  the  proposed  war  revenue  tax  on 
Savings  Banks.  This  Committee,  immediately  upon  the 
adjournment  of  the  meeting,  arranged  to  carry  out  your 
instructions,  and  with  Superintendent  Kilburn  went  to 
Washington  the  following  week,  where  they  were  joined 
by  Colonel  Myron  T.  Herrick,  of  Ohio,  Mr.  Henry  R. 
Wooster,  of  Deep  River,  and  Mr.  A.  E.  Hart,  of  Hartford, 
Conn. 

After  preparing  a  very  careful  statement  of  our  case, 
your  Committee  sought  and  obtained  interviews  with 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    151 

members  of  the  Finance  Committee  of  the  Senate,  and 
of  the  Ways  and  Means  Committee  of  the  House.  Sena- 
tors Piatt  and  Murphy  of  this  State  took  the  matter  up 
with  great  interest  and  assisted  in  placing  us  in  communi- 
cation with  members  we  desired  to  see.  Our  friends  from 
Ohio  and  Connecticut  were  of  much  service.  The  result 
was  an  entire  elimination  of  all  references  to  Savings  Banks 
in  the  "  War  Revenue  Bill "  as  it  became  a  law. 

The  taxation  of  Savings  Bank  depositors  has  been  a 
subject  that  has  occupied  the  attention  of  your  Committee 
for  two  or  three  years  past,  owing  to  the  attitude  of  the 
State  Tax  Commissioners,  who  were  controlled  by  an 
opinion  written  by  a  Deputy  Attorney-General,  that 
deposits  were  subject  to  taxation  at  the  same  rate  as  other 
personal  property.  Two  years  ago  we  obtained  from 
George  W.  Wickersham,  Esq.,  of  Strong  &  Cadwallader, 
an  opinion  which  was  sent  to  the  members  of  the  Associa- 
tion. A  year  ago  a  circular  was  sent  giving  the  decision  of 
Judge  M.  L.  Wright. 

Later,  a  case  was  tried  in  the  Second  Judicial  District, 
and  the  Judge  rendered  a  decision  that  deposits  were 
subject  to  taxation.  This  case  was  appealed  to  the  Su- 
preme Court,  Appellate  Division,  Second  Department, 
and  the  decision  of  the  Court  below  was  affirmed.  Before 
this  decision  was  made  public,  the  State  Tax  Commis- 
sioners brought  an  action  against  the  Assessor  of  the  City 
of  Kingston  to  compel  him  to  place  depositors  in  Savings 
Banks  in  that  city  on  the  tax  rolls.  The  motion  was  argued 
before  Judge  Edwards,  at  Hudson,  who  followed  the  de- 
cision of  Judge  Wright,  and  denied  the  motion.  The  Tax 
Commissioners  appealed  to  the  Appellate  Court,  Third 
Department.  Your  Executive  Committee,  feeling  that 
the  matter  was  of  grave  importance  to  our  banks,  employed 
Mr.  Wickersham.  Through  the  kindness  of  Corporation 
Counsel  John  W.  Searing,  of  Kingston,  Mr.  Wickersham 
was  allowed  to  come  into  the  case  as  counsel,  and  appeared 
before  the  Appellate  Court.  The  decision  of  this  court 
was  an  affirmance  of  Judge  Edward's  action.     We  thus 


152  HISTORY  OF  THE  SAVINGS  BANKS 

had  a  decision  of  the  Appellate  Court  of  the  Second  De- 
partment, that  depositors  in  Savings  Banks  must  be  taxed, 
and  a  decision  of  the  Appellate  Court,  Third  Department, 
that  they  were  not  subject  to  taxation.  The  Tax  Com- 
mission appealed  to  the  Court  of  Appeals,  and  on  March 
14th  this  Court  of  Final  Jurisdiction  rendered  a  decision 
that  depositors  were  exempt. 

During  the  year  the  case  of  the  Assessors  of  the  City  of 
Newburgh  against  the  Newburgh  Savings  Bank  has  been 
carried  through  the  Appellate  Court  and  Court  of  Ap- 
peals, in  both  of  which  courts  Judge  Hirschburg's  deci- 
sion, that  the  bank  was  not  subject  to  taxation  on  its 
surplus,  was  affirmed. 

An  effort  has  been  made  by  your  Committee  to  bring 
all  the  Savings  Banks  of  the  State  into  the  Association, 
with  the  result  that  nine  (9)  banks  have  joined  during 
the  year,  making  a  total  of  one  hundred  and  thirteen 

(113)- 

We  are  sometimes  asked  by  members  of  the  Legisla- 
ture who  are  friendly  to  us  v/hat  steps  are  taken  by  the 
banks  to  ascertain  the  whereabouts  of  the  legal  owners  of 
accounts,  and  what  action,  if  any,  is  taken  to  prevent  ac- 
counts from  being  dormant.  The  only  answer  that  can 
be  made  is  that  each  bank  proceeds  in  its  own  way,  that 
there  is  no  prescribed  course  pursued,  but  that  all  banks 
endeavor  to  have  the  accounts  already  dormant  made 
active,  and  efforts  are  made  in  every  bank  to  prevent  ac- 
counts from  becoming  dormant.  If,  however,  there  is  a 
single  bank  in  this  State  that  is  not  doing  its  utmost  to 
discover  the  owners  of  its  dormant  accounts,  your  Com- 
mittee would  earnestly  urge  the  of&cers  of  such  bank  to 
take  the  matter  up  with  a  strong  determination  to  leave 
nothing  undone  to  find  the  rightful  owners. 

On  February  i8th  Senator  Krum  introduced  a  bill 
amending  the  law  relating  to  Savings  Banks,  allowing  the 
purchase  of  first  mortgage  bonds  of  any  railroad  company 
incorporated  under  the  authority  of  any  of  the  following 
States:     "New  York,  New  Jersey,  Pennsylvania,  Ohio, 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    153 

Michigan,  Indiana,  Illinois,  Kentucky,  Iowa,  and  Minne- 
sota, whose  road  is  located  wholly  or  in  part  in  any  of  the 
same,  and  has  earned  and  paid  regular  dividends  of  not 
less  than  four  per  centum  (4  per  cent.)  per  annum  in  cash, 
on  all  its  issues  of  capital  stock,  for  the  ten  (10)  years  next 
preceding  such  investment,"  etc. 

A  meeting  of  the  Executive  Committee  was  called  at 
once  for  the  consideration  of  this  bill,  and  it  was  promptly 
decided  to  oppose  the  bill  in  this  form.  The  result  of  this 
opposition  was  the  amended  Krum  Bill,  which  permitted 
the  purchase  of  the  first  mortgage  bonds  of  certain  speci- 
fied railroads. 

This  bill  became  a  law  April  2  2d,  and  was  sent  to  the 
members  of  the  Association  at  once. 

The  reappointment  of  Superintendent  Kilburn  was  a 
cause  of  unfeigned  satisfaction  to  every  Savings  Bank 
officer  in  the  State,  and  for  this  appointment  we  owe  Gov- 
ernor Roosevelt  our  heartiest  thanks.  All  that  your 
Committee  needs  to  say  of  Superintendent  Kilburn  is 
that  he  has  shown  the  same  devoted  interest  in  everything 
that  relates  to  the  welfare  of  the  depositors  in  our  banks, 
and  the  same  uncompromising  opposition  to  everything 
that  could  possibly  injure,  that  has  characterized  his  whole 
administration. 

In  view  of  the  large  number  of  bills  that  have  been  intro- 
duced each  year  that  would,  if  they  became  laws,  prove 
disastrous  to  our  banks,  it  is  a  source  of  hearty  congratula- 
tion that  Senator  L.  H.  Humphrey,  of  Warsaw,  was  again 
appointed  Chairman  of  the  Committee  on  Banks.  He  has 
proved  himself  to  be  an  able,  honest,  and  efficient  legis- 
lator, and  has  been  of  invaluable  assistance  to  your  Com- 
mittee for  the  past  four  years. 

In  the  Assembly  Mr.  James  B.  McEwan,  of  Albany,  was 
Chairman  of  the  Committee  on  Banks.  His  honesty  and 
good  judgment  were  apparent  in  his  action  on  bills  af- 
fecting our  banks,  causing  him  to  throw  the  weight  of  his 
influence  against  every  measure  calculated  to  injure  in 
any  way  these  institutions.     Your  Committee  was  given 


154  HISTORY  OF  THE  SAVINGS  BANKS 

a  patient  hearing  on  every  measure,  and  received  from 
Mr.  McEwan  only  courteous  treatment. 

(Subsequently,  Mr.  McEwan  became  Mayor  of  Albany, 
and  Trustee  of  the  National  Savings  Bank  of  Albany.) 


DORMANT  ACCOUNTS 

The  Chair  called  the  attention  of  the  meeting  to  that 
portion  of  the  report  of  the  Executive  Committee  refer- 
ring to  dormant  accounts,  so  called,  and  suggested  that 
the  subject  be  taken  up  and  discussed,  in  order  to  ascer- 
tain whether,  as  an  association,  it  was  not  possible  to  de- 
vise some  means  by  which  these  accounts  could  be  con- 
stantly lessened,  rather  than  increased. 

In  furtherance  of  the  subject,  the  Chair  called  upon  Mr. 
Bryan  H.  Smith,  the  President  of  the  Brooklyn  Savings 
Bank,  to  give  in  detail  the  system  adopted  by  that  large 
institution,  containing  deposits  amounting  to  between 
thirty  and  forty  miUions  of  dollars,  by  which  it  had  now 
only  $1 1, GOO  of  dormant  accounts. 

Mr.  Smith  said :  I  am  rather  surprised  to  be  called  upon 
to  say  anything  about  this  matter,  but  by  chance  I  hap- 
pened to  mention  it  to  the  Executive  Committee,  and 
your  President  has  asked  me  to  make  a  short  statement  of 
the  system  employed  by  the  Brooklyn  Savings  Bank  in 
regard  to  dormant  accounts.  This  bank  is  seventy-three 
years  old  and  has  about  thirty-three  million  dollars  of  de- 
posits, and,  as  he  said,  the  dormant  accounts,  as  reported 
this  month,  amount  to  $ii,ooo.  I  will  say  that  a  large 
number  of  these  accounts  are  under  $io.  The  system 
was  begun,  before  I  was  an  ofi&cer  of  the  bank,  in  rather  a 
crude  fashion,  but  the  results  have  proven  to  be  very 
beneficial.  Since  I  have  been  in  the  bank  I  have  in- 
augurated new  measures  to  make  the  system  more  perfect, 
and  I  have  a  statement  here  of  the  result.     The  system 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    155 

has  been  to  draw  off  in  a  blank  book  all  accounts  in  a  cer- 
tain year  in  which  there  has  been  no  transaction.  There 
is  a  signal  on  the  ledger  which  shows  the  last  date  at  which 
an  entry  was  made,  either  of  a  deposit  or  a  draft,  or  the 
writing  up  of  the  interest.  That  last  date  determines  the 
entry  in  that  blank  book  for  that  special  year.  Then  the 
clerks,  at  their  convenience,  hunt  up  the  residences,  or  the 
latest  known  residences,  of  those  persons  whose  names  ap- 
pear in  the  accounts  and  in  the  blank  books,  and  send  out 
a  printed  notice  asking  the  depositor  to  appear  at  the 
bank  and  have  the  interest  entered. 

Of  course,  having  commenced  so  many  years  ago,  the 
work  is  comparatively  light  now  to  what  it  would  be  if  the 
same  work  was  commenced  anew,  particularly  in  large 
banks.  In  the  year  1877 — up  to  this  year,  when  the  ac- 
counts for  that  year  became  dormant,  being  twenty-two 
years  old — there  was  one  account  added;  m  1878  there 
were  five  inactive  accounts.  I  will  say  that  there  are 
60,000  accounts  in  the  bank.  In  that  year,  1878,  every 
account  is  active,  except  five,  which  are  not.  We  go  on 
from  1878  down  to  1892,  which  is  the  last  book  drawn  off. 
The  active  accounts  stand  at  five,  twelve,  twenty,  fifteen, 
twenty-nine,  twenty-seven,  forty-three,  forty-two  down  to 
1890,  in  which  year  there  are  158  inactive  accounts.  The 
year  1892  has  215,  and  1893,  163.  Out  of  2,744  notices 
sent  out,  1,564  of  these  accounts  have  been  made  active 
in  consequence  of  these  notices,  and  there  remains  now 
only  1,180  for  the  twenty-one  years  past.  These  turn 
up  themselves  every  little  while.  In  addition  to  the  no- 
tices, we  do  something  else.  When  the  printed  notices 
are  returned  to  the  post  office,  as  "Not  found,"  we  have 
a  man  who  then  takes  them  up  separately  and  makes  an 
attempt  to  find  them.  He  is  in  the  nature  of  a  detective, 
and  he  does  find  a  great  many.  Incidents  occur  in  the 
finding  of  these  people  which  are  very  interesting.  They 
show  peculiarities  of  people  which  are  very  amusing  some- 
times. For  instance,  I  will  mention  the  case  of  a  woman 
who  put  money  in  the  bank  ten  years  ago  and  had  for- 


156  HISTORY  OF  THE  SAVINGS  BANKS 

gotten  all  about  it.  You  could  not  convince  her  that  she 
ever  had  put  money  in  the  bank  at  all.  When  you  take 
her  to  the  book  and  show  her  her  own  signature  she  is  sur- 
prised, but  very  glad  to  find  that  she  has  got  some  money 
there.  That  idiosyncrasy  seems  to  belong  only  to  women. 
They  put  a  little  money  in  the  bank  in  early  life,  and  they 
lose  their  pass  book,  and  forget  all  about  it.  We  have  had 
some  very  strange  illustrations  of  that  peculiarity.  I  can 
give  one  instance,  the  result  of  which  was  very  pleasant 
to  us.  A  man  put  in  some  money  in  trust  for  his  only 
child,  a  daughter.  He  was  very  secretive  in  his  nature 
and  would  not  take  a  pass  book.  Of  course  all  that  rep- 
resented the  money  was  a  small  ticket.  He  added  to 
that  account  several  times  a  year  $5,  $10,  $20,  or  $50. 
The  account  and  the  pass  book  remained  in  the  bank.  It 
was  found  out  after  a  while  that  he  had  not  appeared  at 
the  bank  in  about  ten  years.  Then  this  detective  set  to 
work  to  find  him.  He  went  to  his  last-known  residence; 
nobody  knew  anything  of  him  or  his  family.  Then  the 
detective  used  his  judgment  what  to  do  and  inquired  of 
every  house  in  that  block,  or  the  next  block,  until  he  found 
some  one  who  remembered  that  family.  He  found  an  old 
lady  who  remembered  the  family  very  well.  She  said: 
"That  man  is  dead;  he  had  but  one  daughter."  The 
detective  said : "  What  became  of  her?  "  The  answer  was : 
"All  that  I  heard  was  that  she  was  sent  to  a  relative  in 
New  Jersey." 

That  seemed  a  rather  difficult  thing  to  trace,  but  our 
detective  devised  a  plan  to  trace  it.  He  wrote  a  note  to 
every  postmaster  of  any  town  of  any  size  in  New  Jersey 
and  asked  if  such  a  person  lived  in  that  town.  The  post- 
masters are  generally  ver>"  courteous  and  attentive,  but 
he  did  not  get  any  replies  which  were  satisfactory  for  a 
long  time.  Then  he  commenced  on  the  smaller  towns  and 
finally  got  a  reply  from  a  small  place  in  New  Jersey  that 
there  was  a  young  woman  in  that  town  by  that  name  teach- 
ing school.  He  wrote  her,  asking  her  certain  questions  as 
to  her  residence  in  Brooklyn,  her  father's  age,  and  so  forth, 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    157 

and  she  replied,  identifying  herself  perfectly  as  the  person 
for  whom  the  money  was  deposited;  I  wrote  to  her  then 
that  it  was  possible  there  might  be  some  money  in  the 
bank  that  belonged  to  her  and  asked  her  to  come  to  Brook- 
lyn; not  to  send  anybody,  but  to  come  herself.  The  first 
thing  I  did  when  she  appeared  was  to  find  out  if  she  ever  had 
any  brothers  or  sisters.  Ascertaining  that  she  answered 
every  question  correctly,  I  had  the  pleasure  of  telling  her 
that  she  had  $1,800  in  the  bank.  Such  instances  as  that 
crop  up  aU  the  time  from  the  result  of  these  investigations. 

If  any  gentleman  in  the  neighborhood  will  come  to  our 
bank,  our  bookkeeper  will  show  him  his  blank  book  and 
the  exact  system,  with  which  I  am  not  entirely  familiar 
— the  way  it  is  carried  on  now — although  I  organized  it. 
I  think  that  is  about  all  that  I  can  say.  I  am  very  much 
obliged  to  you  for  your  attention,  gentlemen. 

Mr.  Andrew  Mills:  Mr.  Chairman,  I  may  say  a  word 
in  regard  to  the  bank  I  represent.  This  question  of  how 
to  dispose  of  dormant  accounts  is  one  of  importance  for 
the  consideration  of  the  officers  of  Savings  Banks.  For 
the  last  ten  or  twelve  years  I  have  been  associated  with 
our  President,  in  committee  work  before  the  Legislature 
at  Albany,  and  each  year,  with  renewed  force,  dormant 
account  bills  have  been  brought  forward  for  consideration. 
The  motive  in  introducing  these  bills  we  know.  At  the 
same  time  we  are  compelled  to  oppose  them,  whatever 
the  motive  may  be.  As  the  banks  grow  in  deposits,  the 
number  of  these  accounts  naturally  increases,  and  with 
the  increased  number  and  the  increased  amount  exists 
increased  danger.  I  think  that  anything  we  can  say  or  do 
to  cause  the  officers  of  Savings  Banks  to  realize  the  im- 
portance of  this  fact,  and  to  take  every  measure  they  can 
to  make  these  dormant  accounts  active,  will  be  of  service 
to  the  Savings  Bank  system  of  the  State. 

Some  of  the  legislators,  whose  bills  we  were  instru- 
mental in  defeating  the  past  season,  threaten  us  openly 
that  they  are  coming  back  next  year  armed  with  renewed 
energy  and  determination,  and  that  they  will  use  their  best 


158  HISTORY  OF  THE  SAVINGS  BANKS 

endeavors  to  have  some  dormant  account  bill  passed  by 
the  Legislature.  You  cannot  drive  the  idea  out  of  the 
head  of  the  average  legislator,  who  knows  nothing  of  the 
real  facts,  that  the  Savings  Bank  officers  and  trustees  are 
making  a  large  amount  of  money  out  of  what  are  called 
dormant  or  unclaimed  deposits.  One  of  the  Senators  of 
this  State  stated  in  Committee  two  years  ago  that  it  was 
an  acknowledged  fact  that  Savings  Bank  buildings  were 
all  built  out  of  unclaimed  deposits.  We  must  do  all  we 
can  to  get  rid  of  the  dormant  or  inactive  account.  I  think 
that  if  we  can  impress  upon  the  majority  of  the  members 
of  this  Association  the  importance  of  action,  we  will  have 
accomplished  a  good  work. 

Mr.  J.  Howard  King:  In  the  remarks  which  I  have 
listened  to  by  the  last  three  or  four  speakers  there  are 
ideas  expressed  of  which  I  cannot  wholly  approve,  as  I 
think  they  might  lead  those  not  fully  informed  upon  the 
subject  to  entertain  a  false  impression  of  the  real  condition. 
Everybody  knows  that  there  is  an  effort  being  made  to 
find  dormant  accounts.  If  they  are  not  found,  they  do 
not  belong  in  any  sense  of  the  word  to  the  State  at  large. 
When  we  opened  our  new  bank  building  a  short  time  since, 
a  large  percentage  of  the  class  of  people  of  this  State  who 
are  looking  for  dormant  accounts  for  their  own  advantage 
told  us  that  our  building  was  built  out  of  unclaimed  de- 
posits, and  the  fact  is  that  we  have  only  $27,000  worth  of 
dormant  accounts,  and  we  are  the  second  oldest  bank  in 
the  State.  Now  I  think  we  should  look  out  for  ourselves. 
Within  the  last  six  weeks  two  accounts  have  been  presented 
to  us  that  were  fifty  years  old.  One  man  presented  his  in 
person,  and  the  other  was  presented  by  the  heirs  repre- 
senting the  account.  We  cannot  tell  when  those  accounts 
may  be  presented  for  payment.  To  publish  the  fact  that 
we  cannot  find  out  anything  about  these  accounts  is  ex- 
ceedingly poor  judgment;  and,  if  I  may  be  permitted  to 
make  a  suggestion  to  you,  I  don't  believe  the  Association 
would  develop  anything  except  something  that  you  don't 
want  to  have  developed. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    159 

Mr.  McMahon :  I  wish  to  add  a  few  words,  suggested  to 
me  by  the  remarks  of  Mr.  King,  whom  we  all  esteem  very 
highly.  I  regret  to  say  that  I  cannot  agree  with  his  con- 
clusion. I  think  the  time  has  arrived  when  we  should 
give  the  greatest  publicity  to  this  subject-matter  of  the 
dormant  accounts  which  has  been  made  here  to-day. 
There  are  turning  up  every  little  while  claimants  for  these 
accounts  which  have  been  dormant  for  years.  Within  a 
few  months  we  have  had  an  occasion  of  that  kind.  It  was 
a  case  of  a  man  who  lived  in  this  city,  and  there  had  not 
been  a  transaction  in  his  book  for  thirty  years.  It  was 
a  matter  of  nearly  $2,000.  We  asked  him  why  he  had  not 
put  in  an  appearance.  He  said:  "I  knew  your  bank  was 
all  right;  I  had  nothing  to  add  to  the  account,  and  I  was 
trying  to  save  that  money  for  my  old  age."  Those  claims 
are  turning  up  quite  often,  showing  that  it  is  unfair  to 
consider  the  accounts  dormant,  or  entirely  dead,  at  any 
time  up  to  fifty  years  at  least.  I  do  not  see  that  the 
Savings  Banks  have  anything  to  conceal  in  this  direction. 
If  we  have,  then  that  is  the  more  reason  why  bills  should 
be  offered  in  the  Legislature  and  the  thing  showed  up.  I 
claim  that  the  bold,  honest  way  is  the  best  way.  By  tak- 
ing hold  of  the  matter  in  that  shape,  the  legislators  will 
see  that  we  have  nothing  to  conceal,  and  if  they  can  aid  in 
giving  Hfe  to  these  dormant  accounts  we  would  be  pleased 
to  have  them  do  so. 

Mr.  King :  I  had  supposed  there  never  was  a  single  bank 
which  favored  handing  over  their  funds  to  the  State  be- 
cause the  accounts  were  dormant.  The  theory  I  believe 
in,  and  the  one  I  think  which  ought  to  be  practised,  is 
that  we  can  take  care  of  that  money  quite  as  well  as  the 
State  can.  There  wUl  not  be  very  many  sleeping  accounts 
if  we  hand  them  over.  There  will  be  owners  of  some  kind 
found  for  them  if  the  accounts  ever  get  into  the  hands  of 
the  State.  They  won't  be  dormant  then;  they  will  be 
the  most  active  of  all  accounts. 

I  perhaps  sympathize  in  a  measure  with  what  Mr.  Mc- 
Mahon has  said.     I  don't  think  we  have  anything  to  con- 


i6o  HISTORY  OF  THE  SAVINGS  BANKS 

ceal,  but  I  do  think,  even  from  what  he  said,  that  if  we 
show  that  we  are  making  an  effort  to  find  out  these  ac- 
counts, and  we  know  much  better  how  to  find  the  owners 
out  than  any  one  else,  I  think  that  would  be  the  best  thing 
to  do — all  that  is  possible  to  do — and  much  better  than  to 
hand  them  over  to  the  State,  or  any  portion  of  them.  The 
State  has  no  more  right  to  the  money  than  General  Wash- 
ington has,  I  have  just  come  from  a  meeting  of  the  order  of 
the  Cincinnati,  so  that  my  mind  is  full  of  General  Washing- 
ton, and  you  must  excuse  me  for  having  referred  to  him. 

The  President :  The  question  of  dormant  accounts,  as 
I  have  said,  is  a  serious  one,  and  the  object  of  your  Execu- 
tive Committee,  in  referring  to  them  so  strongly  in  their 
annual  report,  is  from  a  desire  to  throw  as  much  light  as 
possible  upon  the  methods  by  which  the  number  and  the 
amounts  of  these  accounts  may  be  kept  down.  In  my  own 
bank,  with  some  thirty-six  millions  of  deposits,  we  have 
about  $32,000  of  dormant  accounts.  I  intend  during  the 
coming  year  to  look  thoroughly  into  the  system  which  Mr. 
Smith  has  adopted  in  Brooklyn,  and  I  propose  to  have 
printed  upon  every  pass  book — even  stamping  the  old 
books  as  they  are  presented  for  transactions  at  the  bank — 
a  statement  showing  the  necessity  on  the  part  of  deposi- 
tors of  presenting  their  books  from  time  to  time  for  inter- 
est to  be  written  up.  I  propose,  in  other  words,  if  possible, 
to  adopt  for  my  own  bank  some  system  by  which  these 
accounts  can  be  kept  down.  In  most  instances  these  ac- 
counts are  not  dead  accounts,  but  simply  dormant,  and 
at  the  end  of  another  year  I  hope  to  be  able  to  be  of  some 
service  to  my  fellow  officers  by  being  in  a  position  to  make 
some  suggestions  which  will  lessen  the  danger  of  being 
forced  to  make  public  all  the  information  we  have  about 
accounts  of  this  character,  or  to  turn  over  the  accounts  to 
the  State.  If  any  such  bill  is  passed  in  the  future,  one 
thing  is  certain  so  far  as  I  am  concerned,  and  that  is  the 
authorities  will  never  obtain  any  facts  from  me,  nor  will  I 
turn  over  one  dollar  to  the  State  until  the  question  as  to 
the  right  of  the  State  to  demand  the  information,  or  to 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    i6i 

compel  the  payment  of  these  moneys,  has  been  passed 
upon  by  the  Supreme  Court  of  the  United  States.  These 
accounts  are  of  the  nature  of  a  contract  between  the  bank 
and  the  depositor.  The  money  does  not  belong  to  the 
State.  If  they  are  never  called  for,  the  interest  goes  to  the 
depositors  at  large.  The  object  of  the  bills  introduced  is 
to  obtain  the  information  which  constitutes  the  identifica- 
tion of  the  original  depositor,  or  give  the  connection  be- 
tween his  heirs  and  the  original  depositor.  If  any  bill  of 
this  character  ever  becomes  a  law,  and  my  bank  is  required 
to  give  such  information  to  the  department  at  Albany,  it 
will  never  get  that  information  until  I  am  forced  to  give 
it  by  the  highest  court  in  the  land.  I  do  not  propose  to 
give  away  my  evidence.  I  will  keep  it  for  the  protection 
of  my  depositors.  When  the  courts  of  the  land  determine 
that  I  shall  give  it,  I  will  give  it,  and  not  before. 

Upon  this  subject  we  should  educate  ourselves,  and  we 
should  apply  ourselves  to  the  proper  solution  of  the  prob- 
lem involved.  These  accounts  should  be  kept  down  as 
far  as  possible.  If  we  do  that,  we  will  do  well.  The  last 
public  announcement  of  the  amount  of  these  dormant  ac- 
counts of  the  banks  of  this  State  was  given  at  the  Consti- 
tutional Convention  held  a  few  years  ago,  and  they 
amounted  to  a  million  and  a  half  of  dollars,  out  of  a  total 
deposit  of  seven  hundred  millions  of  dollars  in  the  banks. 
Of  this  $800,000  was  in  one  bank. 

ADDRESS   OF    SUPERINTENDENT   F.   D.    KILBURN 

Superintendent  F.  D.  Kilburn,  of  the  State  Banking  De- 
partment, then  addressed  the  Convention,  saying  in  part: 

The  history  of  legislation  concerning  these  banks  for  the 
past  few  years  demonstrates  that  even  some  of  those  who 
make  our  laws  have  much  to  learn  in  this  connection.  It 
is  amusing  and  yet  somewhat  exasperating  to  find  people, 
otherwise  well-informed,  who  believe  and  unhesitatingly 
assert  that  uncalled-for  or  dormant  accounts  are  used  in 


i62  HISTORY  OF  THE  SAVINGS  BANKS 

building  large  and  extravagant  bank  buildings,  that  Sav- 
ings Banks  are  stock  institutions  out  of  which  the  officers 
and  trustees  are  making  enormous  profits ;  that  all  surplus 
earnings  go  to  enrich  the  officers,  and  that  the  interests 
of  the  depositors  are  antagonistic  to  those  of  the  trustees. 

I  think  it  was  Artemus  Ward  who  said:  "It  is  better 
not  to  know  so  much  than  to  know  so  much  that  isn't  so." 
Whoever  said  it  must  have  known  something  of  the  alto- 
gether too  extensive  misapprehension  concerning  the  sav- 
ings institutions  of  our  State.  Many  of  you  have  come 
in  touch  with  the  legislation  referred  to  and  have  encoun- 
tered these  false  notions  and  impressions  even  among  our 
lawmakers. 

Let  me  assert  the  truth  regarding  these  matters  in  the 
hope  that  I  may  correct,  in  a  measure  at  least,  the  errone- 
ous opinions  to  which  I  have  referred. 

1.  Under  the  law  only  those  accounts  which  have  not 
been  increased  nor  diminished  by  deposits  or  withdrawals, 
exclusive  of  interest  credits,  for  a  period  of  twenty-tv/o 
years,  become  dormant.^ 

2.  No  account,  dormant  or  otherwise,  can  ever  be 
used  or  appropriated  by  the  bank  or  its  officers  for  the 
erection  of  a  bank  building,  or  for  any  other  purpose,  or 
disposed  of  in  any  manner  except  by  paying  it  to  its  right- 
ful owner. 

3.  Savings  Banks  in  this  State  are  not  stock  corpora- 
tions, and  all  their  earnings,  except  the  amounts  paid  in 
salaries  for  services  actually  rendered,  and  for  necessary 
expenses,  belong,  together  with  all  assets,  to  the  depositors. 

4.  A  Savings  Bank  deposit  never  becomes  outlawed, 
and  the  bank  is  bound  to  repay  it  with  interest  when  called 
for  by  the  rightful  owner  upon  proper  proof  of  identity. 

Savings  Banks  are  benevolent  in  their  character.  They 
are  organized  for  the  purpose  of  furnishing  a  means  by 
which  the  thrifty  working  class  may  save  and  invest  their 
earnings.     They  also  are  designed  for  the  widow  and  the 

I  The  Banking  Law  of  the  State  of  New  York  (chap.  2  of  the  Consolidated 
Laws,  as  amended  by  chap.  369  of  the  Laws  of  1914,  article  6,  sec.  274)  provides 
for  a  period  of  twenty  instead  of  twenty-two  years. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    163 

orphan  dependent  upon  the  income  perhaps  of  a  few  thou- 
sand dollars  left  them  by  a  deceased  husband  and  father. 

I  regard  them  as  safe  and  conservative  as  human  in- 
genuity can  make  them.  The  law  governing  them,  their 
history  for  the  last  eighteen  years,  and  the  character  gener- 
ally of  the  men  controlling  them,  all  testify  to  their  stabil- 
ity and  safety. 

I  would  not  be  understood  as  meaning  that  some  things 
about  them  might  not  be  better,  or  that  there  is  never  dis- 
honesty or  loss  connected  with  them.  These  results  will 
occasionally  follow  as  long  as  humanity  remains  fallible. 

What  I  do  assert,  however,  as  the  result  of  some  oppor- 
tunity of  forming  a  correct  judgment,  is  that  the  Savings 
Banks  of  the  State  of  New  York  are  the  most  economi- 
cally managed  financial  institutions  of  our  commonwealth, 
and  furnish  the  safest  field  for  small  savings  and  invest- 
ments. 

Statistics  are  usually  uninteresting,  and  yet  in  connec- 
tion with  Savings  Banks,  in  which  so  many  people  are 
interested,  they  may  be  instructive  and  suggestive.  There 
are  129  Savings  Banks  in  the  State,  having  on  January, 
I,  1899,  total  assets  amounting  to  $923,420,861.82  and 
liabilities  as  follows: 


Due  depositors        $  816,144,367.53 

Other  liabilities 379,871.19 

Surplus  funds 106,896,623.10 


The  increase  in  deposits  during  the  year  1898  was 
459,  451.38.     The  number  of  open  accounts  was  1,865,- 
653 ,  a  gain  for  the  year  of  60,3  73 . 

About  twenty-eight  per  cent,  of  the  total  population 
of  the  State  are  Savings  Bank  depositors. 

The  administrative  expenses  for  the  year  1898,  includ- 
ing salaries,  rent,  repairs  on  bank  buUdings,  light,  fuel, 
appraisal  fees,  taxes  on  real  estate,  and  all  other  expenses, 
amounted  to  $2.73  on  each  $1,000  of  assets. 

These  figures  show  plainer  than  anything  I  can  say 


i64  HISTORY  OF  THE  SAVINGS  BANKS 

the  thrift  and  industry  of  the  comparatively  poor,  and 
suggest  the  vast  importance  of  these  institutions  and  the 
interests  they  represent.  So  beneficent  and  important 
are  they  that  the  State  should  foster  and  protect  them 
to  the  fullest  extent,  and  be  very  sure  to  adopt  no 
policy  which  will  impair  in  any  degree  their  usefulness  or 
sta.bility. 

To  men  who,  like  the  majority  composing  this  gathering, 
having  given  the  best  years  of  their  lives  to  Savings  Bank 
management,  employing  a  zeal  and  manifesting  a  solici- 
tude for  the  interests  of  depositors  which  could  not  be 
greater  or  more  faithful  if  these  interests  were  their  own, 
it  is  not  necessary  to  argue  the  contention  that  the  welfare 
of  the  New  York  Savings  Bank  system  requires  that  the 
present  policy  of  exempting  these  institutions  and  their 
depositors  from  taxation  shall  continue. 

The  question  of  dormant  accounts  is  one  which  is  mar- 
velous in  its  ability  to  exasperate  and  annoy.  Most  of 
you  are  familiar  with  the  annual  attempts  in  the  Legis- 
lature to  compel  a  list  of  these  accounts,  including  name, 
address,  and  amount,  to  be  published  and  made  a  public 
record.  The  proposition  on  its  face  looks  reasonable  and 
innocent  to  the  uninitiated.  It  is  usually  coupled  with 
another  to  shorten  the  time  now  required  by  law  to  make 
an  account  dormant. 

Not  long  since  an  heir  in  the  State  of  Washington,  the 
granddaughter  of  a  depositor  in  the  year  1824,  recently 
looked  up  her  claim  and  was  put  in  the  way  of  realizing  on 
it.  The  Albany  Savings  Bank  recently  paid  two  accounts 
which  had  not  been  disturbed  for  nearly  fifty  years. 
Too  much  effort,  however,  cannot  be  made  by  the  banks 
themselves  to  search  out  the  owners  of  dormant  accounts. 
Many  banks  make  constant  and  systematic  endeavor  in 
this  direction.  I  cannot  too  strongly  urge  you  all  to  do 
the  same.  According  to  certain  information  in  my  pos- 
session, the  total  amount  of  these  accounts  does  not  ex- 
ceed $1,500,000,  which,  with  the  employment  of  energy 
and  system,  can,  in  my  judgment,  be  largely  reduced. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    165 


ADDRESS   OF  HONORABLE   CHARLES   S.   FAIRCHILD 

When  your  President  demanded  the  title  of  my  theme, 
I  gave  it  as  "The  Relation  of  Savings  Bank  Deposits  to 
General  Business." 

It  is  obvious  that  through  this  system  the  dimes  are 
welded  into  dollars,  and  the  dollars  into  millions,  tens  and 
hundreds  of  millions,  by  combination  becoming  a  force 
that  raises  thirty-story  buildings,  erects  stately  capitols, 
launches  steel-clad  battleships,  transports  armies  over 
land  and  sea,  arms  and  supports  them  in  tropical  jungles, 
where  the  fathers,  sons,  and  brothers  of  your  depositors 
are  doing  deeds  of  intelligent  daring  such  as  have  rarely 
been  equalled,  never  surpassed,  in  the  wars  that  have  been. 
It  is  pleasant  and  interesting  to  let  one's  imagination  fol- 
low to  its  outermost  effects  the  daily  business  of  your  re- 
ceiving tellers.  And  there  is  your  other  side — when  fear 
possesses  men  and  the  work  of  paying  exceeds  that  of  re- 
ceiving tellers;  then,  according  to  the  degree  of  fear,  all 
these  works  must  stop ;  ships  and  armies  must  pause  until 
men  come  again  to  their  usual  and  normal  behef  in  the 
general  average  success  and  good  faith  of  other  men. 

And  how  your  system  acts  and  reacts  upon  your  depos- 
itors themselves:  when  they  believe  in  you,  they  promote 
the  industries  which  give  them  the  means  to  increase  their 
deposits  with  you,  and  through  you  runs  the  golden  circle 
of  well-being.  But  when  the  current  is  reversed,  when  the 
circle  revolves  the  other  way,  your  depositors,  through 
the  fear  of  losing  that  which  they  have  with  you,  shut  down 
the  employments  which  give  them  their  daily  bread,  to 
say  nothing  of  their  savings. 

You  know  how  it  is — how,  when  your  depositors  begin 
to  draw  on  you,  you  in  turn  draw  on  your  commercial 
banks,  and  they  curtail  their  credits;  one  industry  after 
another  stops.  You  know  the  chill  that  seizes  the  busi- 
ness world  when  the  first  rumor  comes  downtown  that  there 
are  abnormal  withdrawals  from  your  deposits. 

Since  Savings  Bank  deposits  have  reached   such  co- 


i66  HISTORY  OF  THE  SAVINGS  BANKS 

lossal  proportions,  this  consideration  is  of  serious  import; 
for  the  combination  of  wealth  has  prodigious  power  for 
evil  as  well  as  for  beneficence.  When  we  consider  the  evil 
not  only  to  the  whole  community  but  also  to  your  clients 
themselves  from  unreasonable  and  groundless  fear — and  I 
am  safe  in  saying  that  the  fears  that  have  arisen  from  time 
to  time  about  deposits  in  Savings  Banks  were  groundless— 
we  must  be  impressed  with  the  importance  of  a  safeguard 
against  these  dangers — evergrowing  dangers. 

I  hesitate  to  suggest  the  remedy;  but  I  have  some- 
times thought  that  if  the  mutuality  of  interests  of  your 
depositors  was  more  generally  recognized,  and  a  greater 
limit  put  upon  the  right  of  withdrawal,  even  going  to  the 
extent  of  looking  upon  the  transaction  as  an  investment 
payable  only  out  of  receipts  taken  subsequent  to  notice  of 
withdrawal,  that  menace  to  the  business  community  would 
be  removed,  with  consequential  net  benefit  to  your  de- 
positors in  the  way  indicated. 

The  concentration  of  power  represented  here  in  terms 
of  dollars  is  most  impressive,  and  when  a  man  tries  to 
philosophize  about  it  and  seeks  the  cause  and  future  of  it 
all,  he  is  possessed  by  the  fascination  always  felt  in  the 
presence  of  the  resistless  forces  of  nature.  For  although 
you  gentlemen  are  officers  and  trustees  of  great  beneficent 
concerns,  which  you  manage  so  carefully  and  well,  al- 
though governments  have  devised  laws  to  restrain  and 
safeguard  your  investments,  yet,  in  my  estimation,  all 
that  you  do  and  all  that  the  laws  try  to  do  is  to  somewhat 
modify  and  beneficently  apply  forces  that  have  their  being 
quite  outside  of  human  legislation  and  man's  conscious 
intention. 

Speaking  in  this  presence,  I  must  be  modest  in  assertion 
as  to  facts,  I  believe,  however,  that  in  the  world's  his- 
tory institutions  like  the  modern  Savings  Banks  have  been 
known  but  little  more  than  eighty  years,  and  in  that  time 
there  has  rolled  together  a  total  of  between  seven  and 
eight  billions  of  dollars  in  such  institutions,  taking  the 
world  as  a  whole — of  this  about  two  billions  in  our  own 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    167 

country,  more  than  one  third  of  this  being  in  our  State  of 
New  York. 

It  is  significant  that  this  combination  of  power,  capital, 
or  what  you  may  choose  to  call  it,  has  grown  step  by  step 
as  the  rapidity  with  which  property  and  persons  could  be 
moved  has  grown.  As  man's  wit  has  applied  steam  and 
electricity  more  and  more  efficiently  to  man's  use,  so  has 
grown  the  concentration  of  mankind  in  cities,  so  has  grown 
the  combination  of  the  affairs  of  men,  and  so  I  venture  to 
say  these  combinations  will  continue  to  grow.  All  of  this 
tremendous  movement  of  the  centuries  which  has  such 
striking  exemplification  in  your  banks  can  only  be  in 
obedience  to  nature's  laws  powerfully  working.  It  is  not 
by  man's  conscious  design;  he  is  driven  on  by  forces  be- 
yond his  control.  Of  course  there  will  be  successes  and 
failures,  wise  and  unwise  enterprises,  but  that  the  forces 
of  nature  will  relax  we  cannot  hope.  Sigh  as  we  may  for 
the  old  times,  all  that  man  can  do  is  to  seek  safeguards  to 
protect  himself  against  injuries  when  these  forces  cease 
their  steady  progress  through  man's  unwisdom  in  their 
application.  But  let  man  and  his  legislators  be  modest 
and  know  that  the  harm  they  are  likely  to  do  will  probably 
come  from  too  much  rather  than  too  little  attempted  control 
of  forces  and  powers  too  great  for  man's  strength,  which  are 
in  all  wisdom  designed  for  man's  good  and  which  if  abused 
contain  in  themselves  ample  power  to  inflict  punishment. 

But  I  am  being  led  far  afield  and  must  stop,  with  my 
thanks  for  this  kind  invitation  from  you  who  are  so  good 
and  beneficent  a  part  of  the  mighty  movement  of  the  age. 

ADDRESS   OF   PROFESSOR  WM.    G.    SUMNER 

"The  Power  and  Beneficence  of  Capital"  was  the  sub- 
ject of  a  very  able  paper  by  Prof.  Wm.  G.  Sumner,  of 
Yale  University.    Professor  Sumner  said : 

Some  years  ago  I  listened  to  an  address  by  a  social 
agitator  who  said:  "I  can  get  along  with  anybody  in  my 


1 68  HISTORY  OF  THE  SAVINGS  BANKS 

audiences  except  these  mean,  stingy,  little  fellows  who 
have  saved  up  a  few  hundred  dollars  in  the  Savings  Bank 
and  then  have  borrowed  enough  more  to  build  a  little 
house  of  two  tenements,  one  of  w^hich  they  rent.  When  I 
begm  to  talk  about  interest  and  rent,  and  Henry  George, 
they  get  up  and  go  out  by  the  whole  seatful  at  a  time." 
The  statement  was  the  most  eloquent  recognition  I  ever 
heard  of  the  power  and  beneficence  of  capital.  It  has 
always  remained  in  my  memory  as  a  confession  by  an 
opponent  of  the  education  effected  by  savings,  and  of  the 
benefit  conferred  on  society  by  Savings  Banks.  I  make 
it  the  text  for  the  remarks  which  I  will  address  to  you  on 
this  occasion. 

We  hear  a  great  deal  in  these  days  about  social  discon- 
tent. It  seems  to  be  taken  for  granted  that  discontent  is 
a  sufficient  proof  of  grievance  which  third  parties  are 
bound  to  take  cognizance  of  and  redress.  It  might  be 
argued  with  far  greater  plausibility  that  discontent  is  a 
proof  of  prosperity.  If  you  look  around  the  world  to-day 
you  will  find  that  discontent  is  greatest  where  the  chances 
are  greatest.  A  man  who  has  never  had  anything  or  a 
chance  to  get  anything  is  not  discontented.  He  rests  con- 
tented with  what  he  has  always  been  accustomed  to.  Let 
him  enjoy  an  opportunity  and  win  something  and  the 
effect  will  be  to  excite  his  wish  to  win  more.  There  is 
more  discontent  in  one  house  in  the  United  States  or  in 
England  than  in  the  whole  Russian  Empire.  Discontent 
exists,  then,  where  there  are  opportunities,  and  it  is  a 
stimulus  to  take  advantage  of  opportunities.  In  that 
case  it  is  an  agency  which  produces  achievement  and  drives 
on  what  we  call  progress.  In  other  cases  discontent  is  a 
result  of  conviction  that  opportunities  have  been  lost  and 
that  it  is  too  late  to  recover  them.  Then  again,  discon- 
tent is  the  twin  sister  of  envy,  when  it  is  seen  that  others 
have  profited  better  by  opportunities.  In  no  case  does 
discontent,  as  a  naked  fact,  prove  anything,  and  when  the 
details  are  known  it  never  is  proof  of  a  grievance. 

Our  social  philosophers,  however,  as  I  have  said,  assume 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    169 

that  discontent  is  a  legitimate  and  imperative  demand  for 
a  remedy.  They  treat  it  as  a  social  phenomenon,  and  the 
remedies  which  they  propose  are  societal;  that  is,  they 
are  in  the  nature  of  devices  and  regulations  which  call  for 
the  action  of  the  agencies  of  society.  So  far  as  these  social 
philosophers  get  their  way  we  find  that  it  is  legislation 
which  is  set  at  work,  and  this  legislation  imposes  tasks  on 
functionaries  and  institutions.  The  net  final  and  certain 
result  is  new  burdens  on  taxpayers.  Discontent  is  not 
diminished.  It  is  generally  increased.  If  you  get  a  re- 
port of  the  operation  of  any  of  these  devices  which  have 
already  been  adopted  you  will  find  it  full  of  criticism,  per- 
haps of  derision,  of  the  device.  It  is  pointed  out  how 
crude  the  notion  was;  how  ignorant  of  the  conditions;  how 
irrelevant  to  the  purpose  in  view. 

I  will  not,  however,  now  dwell  upon  this  aspect  of  social 
measures  to  cure  discontent.  What  I  am  now  more  inter- 
ested in  is  the  education  exerted  by  all  this  philosophy  and 
all  these  devices  on  the  people  on  whom  they  are  brought 
to  bear.  The  social  philosophy  which  has  been  in  fashion 
for  a  century  past  has  educated  us  in  the  notion  that  we 
ought  all  to  be  "happy  "  (as  the  phrase  goes)  on  this  earth, 
and  that,  if  we  are  not  so,  we  ought  to  cry  out,  and  then 
that  somebody  is  bound  to  come  and  take  care  of  us. 
Liberty,  equality,  and  happiness  have  been  declared  to  be 
natural  rights,  which  is  interpreted  to  mean  that  they  were 
laid  in  our  cradles  as  our  endowment  for  the  battle  of  life. 
Every  human  being,  on  this  theory,  comes  into  the  world 
with  an  outfit  and  a  patrimony  of  metaphysical  if  not  of 
physical  goods.  This  doctrine  is,  of  course,  very  popular. 
The  men  who  preach  it  are  sure  of  popular  applause  and 
political  power.  TeU  a  man  that  he  ought  to  have  and 
enjoy  all  the  highest  acquisitions  of  civilization,  just  be- 
cause he  has  been  born,  without  labor,  self-denial,  or  study, 
and  that  he  is  a  victim  of  injustice  if  he  does  not  possess 
all  those  good  things,  and  he  will  be  sure  to  be  delighted. 
Some  of  these  grand  old  eighteenth  century  dogmas  which 
lie  on  the  borderline  between  politics  and  social  philosophy 


I70  HISTORY  OF  THE  SAVINGS  BANKS 

have  been  found  very  much  in  the  way  in  our  own  history 
of  the  last  twelve  months.  They  have  been  pushed  aside 
as  out  of  date.  Perhaps  we  may  get  an  incidental  advan- 
tage from  recent  history  if  we  can  throw  them  all  over- 
board together,  but  it  is  more  likely  that  the  buncombe 
element  in  them  has  too  much  value  for  political  purposes 
to  be  sacrificed,  and  so  we  shall  see  that  retained.  We 
may  be  very  sure  that  all  these  theories  of  world  beatifica- 
tion can  produce  nothing  but  disillusion  and  disappoint- 
ment for  the  society  in  which  they  are  current.  The 
human  race  never  received  any  gratuitous  outfit  of  any 
kind  whatever.  No  heathen  myth  ever  was  more  silly  and 
empty  than  such  a  notion.  Talk  about  the  "boon  of 
nature"  and  the  "banquet  of  life"  and  the  "free  gift  of 
land"  is  more  idle  than  fairy  tales.  We  can  speak  now- 
adays with  some  positive  knowledge  about  the  primitive 
condition  of  the  human  race  on  earth,  assuming  now  that 
the  facts  about  the  primitive  condition  of  man  have  some 
bearing  on  our  modern  social  controversies.  We  know 
that  the  human  animal  by  nature  is  more  helpless  in  the 
face  of  nature  than  many  other  animals,  and  that  nature 
did  not  start  the  human  animal  off  with  any  other  rights 
than  those  of  all  the  other  animals.  The  human  race 
came  upon  this  globe  with  no  outfit  at  all.  The  mere  task 
of  existing  and  continuing  here  was  so  great  that  the  hu- 
man race  was  taxed  to  the  utmost  to  meet  it.  The  obvious 
proof  of  that  is  that  large  groups  of  men  have,  in  innumer- 
able instances,  utterly  perished  from  the  face  of  the  earth. 
These  are  facts  of  knowledge  at  the  present  time.  So  far 
as  I  know  they  are  not  disputed  by  anybody. 

I  have  already  suggested  that  these  facts  about  the 
primitive  order  of  things  have  very  little  value  for  modern 
social  controversies.  Their  value  lies  in  quite  another 
direction.  If  we  men  have,  to  any  extent,  conquered  the 
task  of  existence,  if  we  have  risen  to  some  command  over 
nature,  and  if  we  have  created  a  domain  of  rights  between 
ourselves,  it  is  by  civilization  that  we  have  done  it.  The 
good  things  were  not  given  to  us  gratuitously  at  the  outset. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    171 

They  are  the  product  of  the  toil  and  suffering  of  mankind. 
They  belong  at  the  end;  not  at  the  beginning.  The  people 
who  are  nowadays  examining  the  product  and  passing 
judgment  on  it  are  only  betraying  their  own  ignorance  and 
folly.  They  are  quite  dissatisfied  with  it.  They  write 
books,  hold  conventions,  and  pass  resolutions  about  how 
we  ought  to  change  it,  and  they  draft  ideas  about  how 
they  would  like  to  reconstruct  it.  If  we  arrive  at  some 
correct  idea  of  what  society  is  and  what  civilization  is,  we 
shall  regard  all  such  speculations  as  more  absurd  than 
witchcraft  or  astrology.  We  are  the  children  of  the  so- 
ciety in  which  we  were  born.  It  makes  us.  We  are  prod- 
ucts of  the  civilization  of  our  generation.  Only  a  handful 
of  men  can  react  upon  the  society  and  the  age  in  which 
they  live  so  as  to  modify  it  at  all.  They  are  the  very  eUte 
of  the  human  race,  and  after  aU  what  they  can  do  is  only 
infinitesimal.  Civilization  means  the  art  of  living  on  this 
earth.  All  men  have  always  been  trying  to  learn  it.  All 
that  now  is  in  the  order  of  society  is  the  product  of  this 
struggle  of  ages.  It  pours  along  in  a  mighty  flood  which 
bears  us  all  with  it.  In  it  are  all  the  efforts,  passions,  inter- 
ests, and  strife  of  men.  It  is  the  play  of  these  upon  each 
other  which  produces  the  heaving  and  swaying  of  the  flood 
and  determines  its  vast  modifications  of  direction.  If 
you  come  to  a  faint  understanding  of  this  the  man  with  a 
scheme  in  his  pocket  for  the  "reorganization  of  society" 
is  made  to  appear  very  ridiculous. 

The  instrumentality  by  which,  from  the  beginning,  man 
has  won  and  held  every  step  of  this  development  of  civili- 
zation is  capital.  Some  people  talk  about  ideas  and  philos- 
ophy which  they  think  have  ruled  the  affairs  of  men. 
The  ideas  are  only  secondary.  The  philosophy,  when  it 
has  acted  as  a  cause,  has  taken  the  form  of  dogma  and 
has  done  harm  as  often  as  good.  We  may  take  illustra- 
tions in  proof  from  the  present  time.  There  is  a  dogma 
afloat  that  labor  alone  makes  wealth,  so  that  the  whole 
product  should  belong  of  right  to  the  laborer.  Another 
dogma  is  that  limiting  the  hours  of  labor  would  make  work 


172  HISTORY  OF  THE  SAVINGS  BANKS 

for  more  laborers,  and  another  is  that  any  wealth  which 
one  man  accumulates  is  so  much  taken  from  some  or  all 
other  men.  Another  is  that  all  increase  in  the  value  of 
land  or  franchises  is  due  to  the  social  organization  and 
activity,  and,  therefore,  should  not  go  to  the  holders. 
These  dogmas  are  all  false,  but  they  are  of  great  scope. 
They  are  great  fighting  dogmas  because  they  serve  inter- 
ests. It  is  for  this  reason  that  they  win  acceptance,  be- 
cause the  great  reason  for  inventing  dogmas,  principles, 
and  phrases  is  to  use  them  in  controversy.  These  dogmas, 
therefore,  which  I  have  mentioned,  will,  if  adopted  as 
the  worm  of  legislation,  produce  destructive  convulsions 
in  society  and  nothing  else.  In  the  meantime  the  social 
development  is  going  on  by  slow  accretions  which  nobody 
notices.  They  are  won  by  adjustments  between  the  in- 
terests of  men  who  meet  new  problems  every  day  and 
solve  them  as  well  as  they  can  under  the  conditions  pre- 
vailing. These  adjustments  are  all  made  by  means  of 
capital,  because  the  interests  are  all  matters  of  capital  and 
all  the  readjustments  are  secured  by  capital.  In  their  turn 
they  favor  the  creation  of  capital,  because  the  readjust- 
ments which  serve  interests  always  mean  attempts  to  win  a 
given  result  by  a  smaller  expenditure  of  labor  and  capital. 

Others  think  that  "organization"  is  the  great  force 
which  has  made  civilization.  They  think  that  organiza- 
tion is  arbitrary  and  subject  to  manipulation,  and  con- 
sequently it  is  upon  the  organization  that  they  bring  their 
efforts  to  bear.  Organization  has,  of  course,  been  a  com- 
manding phenomenon  in  the  development  of  civilization. 
A  student  of  that  development  is  not  likely  to  disregard 
organization.  For  myself,  I  am  convinced  that  much  is 
yet  to  be  gained  by  better  appreciation  of  the  element  of 
organization.  But  organization  is  only  the  mode  under 
which  the  work  of  life  goes  on.  It  is  not  the  force.  It 
never  can  force  anything.  It  has  to  do  with  the  smooth- 
ness and  harmony  of  the  operations.  In  human  society, 
in  its  lowest  forms,  organization  has  always  produced  it- 
self spontaneously  and  automatically.     It  has,  therefore, 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    173 

just  suited  itself  to  the  case.  It  has  sometimes  become 
traditional  and  dogmatic,  and  for  that  reason  it  has  be- 
come a  hindrance,  preventing  necessary  adjustments. 
Then  societal  convulsions  and  revolutions  have  occurred. 
In  civilized  society  organization  is  equally  spontaneous  and 
automatic.  In  the  civil  organization  some  element  of 
arbitrary  action  has  become  possible,  and  this  it  is  appar- 
ently which  has  caused  the  notion  that  societal  organiza- 
tion is  a  thing  subject  to  conventions  and  resolutions. 
In  regard  to  the  civil  organization,  however,  the  chance  of 
some  arbitrary  action  has  only  introduced  an  element  of 
risk  and  peril,  just  as  an  intelligent  being  runs  the  risk  of 
going  wrong  where  an  instructive  being  never  has  to  face 
any  question  at  all.  All  attempts  so  far  made  to  extend 
the  domain  of  policy  with  social  matters  have  resulted  only 
in  doubt  and  in  warnings  of  danger.  The  proposition  to 
adopt  a  policy  of  organization  can  never  do  anything  but 
disturb  the  harmony  of  the  societal  system  which  is  its 
greatest  advantage.  They  never  wiU  really  change  the 
societal  organization.  It  is  already  controlled  by  the 
mighty  forces  of  interest.  For  instance,  if  so-called  trusts 
are  now  a  real  step  in  the  evolution  of  the  industrial  or- 
ganization, a  legislative  policy  of  sweeping  and  destructive 
opposition  to  them  is  vain.  After  producing  great  con- 
fusion, and  animosity,  and  loss,  it  will  have  to  be  aban- 
doned. The  case  of  department  stores  is  similar  and  more 
simple  and  obvious.  If  the  wages  organization  is  suited 
to  the  present  conditions  of  industry,  it  is  quite  useless  to 
try  to  invent  any  organization  of  labor  to  supersede  it. 
On  the  other  hand,  we  may,  from  this  case,  see  how  the 
organization  changes,  for,  if  the  interests  of  men  are  not 
served  by  the  wages  organization,  they  wiU  seek  to  modify 
it  in  the  detail  in  which  it  is  unsatisfactory,  from  whence 
it  may  foUow  in  time  that  some  different  organization  wiU 
be  gradually  evolved  to  take  its  place.  Harmony  of  ac- 
tion, with  the  highest  possible  satisfaction  of  interests,  is 
the  point  of  equilibrium  toward  which  the  organization  is 
always  tending.    Those  men  nowadays  who  can  foresee 


174  HISTORY  OF  THE  SAVINGS  BANKS 

the  next  steps  to  be  taken  to  advance  on  this  line  are  the 
great  generals  of  the  modern  industrial  army.  If  the  or- 
ganization is  bad,  it  can  waste  and  impede  the  effort.  If 
it  is  good,  it  can  allow  the  effort  to  reach  its  maximum 
result  under  the  conditions.  That  is  the  sum  of  all  that 
can  be  said  about  organization. 

We  must  return  then  to  the  proposition  already  made. 
If  men  are  not  now  in  beastliness  and  utter  want,  it  is  by 
virtue  of  labor  and  self-denial.  Labor  and  self-denial 
have  been  embodied  in  useful  things,  that  is,  capital.  The 
things  won  on  the  stage  have  become  new  instrumentali- 
ties on  the  next  stage.  It  is  not  strange  that  the  growth 
has  been  so  slow,  especially  in  its  earlier  stages,  when  we 
see  how  hard  the  struggle  has  been,  and  how  much  it  has 
been  at  war  with  human  nature.  It  is  only  when  we  have 
won  some  conception  of  the  painful  and  toilsome  effort 
by  which  every  step  has  been  won  that  we  can  estimate 
at  its  full  value  the  civilization  which  we  have  inherited, 
but  then,  too,  we  are  driven  to  believe  that  we  never  can 
gain  anything  more  except  by  the  same  means.  The  great 
reason  why  the  advance  of  civilization  has  been  so  slow  is 
that  it  has  never  gone  forward  steadily.  Its  progress  has 
been  broken  up.  It  has  been  broken  up  by  ignorance  and 
superstition,  which  is,  of  course,  simply  saying  that  it 
never  could  go  on  faster  than  men  knew  enough  to  carry  it 
on.  It  has  also  been  broken  up  by  passion,  and  by  strife 
over  questions  of  policy.  All  this  remains  just  the  same 
now  as  it  ever  was.  Discord,  strife,  and  war  break  up  the 
orderly  and  cooperative  effort  to  reach  a  higher  satisfaction 
of  our  interests,  which  seems  to  be  alone  worthy  of  intelli- 
gent and  civilized  men.  The  ignorance,  folly,  and  strife 
destroy  capital.  The  orderly  and  well-organized  efforts 
to  satisfy,  create,  and  preserve  capital.  The  presence  of 
capital  does  not  insure  the  extension  of  civilization,  for  the 
capital  may  be  wasted  by  error,  or  it  may  be  employed 
entirely  in  an  increase  of  population ;  but  an  extension  of 
civilization  without  an  increase  of  effective  capital  or  a 
diminution  of  members  is  impossible. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    175 

It  may  seem  to  you  that  the  course  of  thought  on  which 
I  have  so  far  led  you  was  somewhat  too  academical  or 
philosophical  for  this  occasion,  but  I  am  now  ready  to  re- 
turn to  the  orator  and  the  Savings  Bank  depositors  whom 
I  mentioned  at  the  outset.  The  facts  and  ideas  which 
I  have  presented  to  you  show  that  the  Savings  Bank  de- 
positor is  a  hero  of  civilization,  for  he  is  helping  in  the 
accumulation  of  that  capital  which  is  the  indispensable  pre- 
requisite of  all  we  care  for  and  all  we  want  to  do  here  on 
earth.  The  more  convinced  you  are  that  the  notions  and 
devices  which  are  offered  to  us  by  social  speculators  as  the 
means  of  social  progress  are  all  in  vain,  and  that  the  whole 
effort  to  find  some  means  of  easily  making  everybody  happy 
is  a  waste  of  time,  the  more  you  will  be  thrown  back  on  the 
industrial  virtues  as  the  only  moral  resources  at  our  com- 
mand which  enable  us  men  to  fight  the  battle  of  life  with 
success.  The  industrial  virtues  are  industry,  frugality, 
prudence,  and  temperance.  We  cannot  deny  the  presence 
of  another  element  which  is  powerful  in  determining  our 
success.  That  is  the  element  of  good  or  ill  fortune.  It 
is  true  that  men  have  fortune,  or  destiny,  or  Divine  Prov- 
idence at  hand  as  a  convenient  agency  on  which  to  throw 
the  blame  for  the  consequences  of  their  own  acts,  especially 
for  those  acts  which  are  violations  of  the  industrial  virtues, 
but  when  all  is  said  in  correction  of  the  popular  abuse  of 
luck,  it  is  useless  to  deny  that  good  or  ill  fortune  may  make 
or  mar  the  success  of  men  in  spite  of  their  most  careful 
endeavors.  This  element,  however,  is  irrational.  There 
is  an  element  in  it  of  which  we  are  ignorant.  Therefore  it 
is  beyond  our  command.  We  have  to  submit  to  it  and 
make  the  best  of  it.  Our  only  means  of  dealing  with  it 
is,  where  we  can  do  so,  to  meet  it  cooperatively,  as  we  do  in 
insurance. 

Returning,  then,  to  the  industrial  virtues,  I  repeat  that 
they  are  our  only  moral  resource  for  winning  success  in 
the  battle  of  life.  The  greater  the  disadvantages  under 
which  one  starts  in  life,  the  higher  the  value  of  these  vir- 
tues for  winning  the  first  foothold  and  making  the  first 


176  HISTORY  OF  THE  SAVINGS  BANKS 

step  to  something  better.  There  is  reason  for  profound 
faith  in  any  device  which  is  proposed  for  societal  improve- 
ment if,  upon  strict  analysis,  we  can  find  that  it  will 
touch  the  springs  of  industrial  virtue  and  raise  the  indus- 
trial virtues  to  higher  activity.  There  is  no  ground  for 
faith  in  any  device  which  does  not  stimulate  those  vir- 
tues. It  is  not  necessary  to  add  that,  if  devices  which  are 
proposed  are  found  upon  examination  to  stimulate  envy 
or  vanity,  or  fondness  for  talk,  or  a  desire  to  live  by  one's 
wits,  they  are  only  mischievous.  It  is  not  easy  for  us  to 
form  estimates  of  each  other's  virtues,  especially  when  we 
look  at  each  other  in  classes,  but  the  Savings  Bank  de- 
positor, as  a  type,  gives  the  surest  and  most  concrete 
evidence  of  the  industrial  virtues.  He  must  be  industri- 
ous, frugal,  prudent,  and  temperate.  He  is  a  capitalist. 
He  is  getting  in  hand  that  power  which,  as  I  have  said,  has 
created  and  now  upholds  all  civilization.  He  is  winning 
a  share  in  its  power.  He  is  getting  the  upper  hand  of  the 
tasks  of  life.  He  is  fortifying  himself  against  bad  luck 
and  disaster.  He  is  developing  his  own  character  by  the 
self-denial  and  the  persistent  pursuit  of  a  selected  purpose 
which  he  is  obliged  to  practice.  You  find  nowhere  else 
such  guarantees  of  sound  judgment,  sober  reason,  and 
moderate  temper  as  are  offered  by  the  fact  of  saving. 
There  is  no  other  guarantee  of  good  citizenship  which  is  so 
simple  and  positive,  and  at  the  same  time  so  far-reaching, 
as  the  possession  of  savings.  The  seatsful  of  Savings 
Bank  depositors  who  went  out  of  the  lecture  proved  it. 

The  old  classical  saying  was:  He  who  has  a  wife  and 
children  has  given  pledges  to  fortune.  He  has  opened 
avenues  by  which  misfortunes  can  reach  him  through 
other  lives.  Capital  is  the  chief  means  of  protecting  those 
dependents.  It  gives  education  to  the  children  and  puts 
them  on  a  higher  plane  for  the  battle  of  life  than  that  on 
which  their  parents  stood.  It  is  right  to  conceive  of  the 
human  race  on  this  earth  as  engaged  in  an  endless  battle 
with  the  conditions  of  existence,  striving  to  so  modify 
them  that  men  may  get  more  out  of  their  lives  in  the  way 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    177 

of  satisfaction  of  the  possibilities  of  human  nature.  For 
a  century  past  the  current,  popular  notion  has  been  that 
the  way  to  win  the  battle  is  to  "raise  the  lower  classes." 
The  notion  seems  to  be  that  the  vicious  criminal  and 
poverty-stricken  classes  are  a  certain  number  of  human 
beings  who  are  miserable  or  harmful.  It  is  thought  that 
if  this  number  can  be  cured  of  social  diseases  aU  will  be 
well.  This  notion  is  based  on  childish  conceptions  as  to 
what  society  is  and  as  to  the  nature  of  social  disease. 
Projects  to  abolish  poverty  are  worthy  of  an  age  which 
has  undertaken  to  discuss  the  abolition  of  disease.  Why 
not  abolish  death  and  be  as  gods  once  for  aU?  Why  not 
resolve  that  everybody  shall  be  good  and  happy?  Why 
not  vote  that  everybody  shall  have  whatever  he  wants? 
Why  trifle  with  details?  If  these  agencies  can  get  us 
anything  they  can  just  as  well  get  us  everything.  The 
trouble  with  creation  out  of  nothing  is  not  to  make  a 
universe;  it  is  to  make  an  atom  of  star-dust.  If,  then, 
we  turn  away  from  all  these  notions  and  devices  and  try 
to  understand  the  case  of  man  on  earth  just  as  it  is,  we 
find  that  our  task  always  is  to  do  the  best  we  can  under 
the  conditions  in  which  we  are  and  with  the  means  which 
we  possess.  Then  it  appears  that  capital  is  the  means  with 
which  we  do  it  and  that  it  is  by  capital  spent  on  the  educa- 
tion and  training  of  the  rising  generation  that  we  keep  up 
that  advancing  fight  against  the  ills  of  life  to  which  I  have 
referred.  I  do  not  suppose  that  the  Savings  Bank  de- 
positors who  left  the  lecture  knew  much  about  this,  but 
that  class  of  men  have  a  way  of  their  own  of  getting  at 
things.  The  possession  of  capital  gives  an  acuteness  of 
insight  into  whatever  affects  capital.  Men  who  have  tried 
saving  have  not  much  patience  with  rhetoric  and  dog- 
matism about  how  to  get  on  in  life,  and  we  know  how  acute 
they  become  in  perceiving  that  the  upshot  of  the  schemes 
is  to  make  them  share  their  savings  with  those  who  have 
never  done  any  saving.  I  suppose  that  when  the  Savings 
Bank  depositors  got  up  and  left  the  lecture  it  was  an  ex- 
pression of  this  impatience. 


178  HISTORY  OF  THE  SAVINGS  BANKS 

I  never  saw  a  poem  about  the  Savings  Bank  depositor. 
Poems  are  all  written  about  heroes,  kings,  soldiers,  and 
lovers.  There  are  plenty  of  poems  about  glory,  and  love, 
and  ambition,  and  even  about  poverty,  but  saving  is 
passed  by  as  sordid  and  mean — utterly  unpoetical.  It 
has  always  been  thought  noble  to  spend  and  mean  to  save, 
which  only  shows  how  far  we  are  yet,  with  all  our  boasting,- 
preaching,  and  discussing,  from  sound  standards  of  judg- 
ment about  the  operations  of  society.  It  has,  however, 
always  been  recognized  that,  among  subjects  of  dramatic 
interest  and  power,  the  hero  struggling  against  adversity 
with  fortitude  and  perseverance  is  one  of  the  grandest. 
In  our  modern,  commercial,  and  unadventurous  life  you 
will  hardly  find  nobler  examples  of  it  than  those  seatsful 
of  people  who,  after  saving  a  little  to  make  a  beginning, 
had  built  two  tenement  cottages  on  which  they  were 
trying  to  pay  off  the  mortgages. 

Some  people  will  answer  that  they  see  the  utility  and 
even  the  moral  grandeur  of  savings  by  poor  people,  but 
that  they  dread  and  disapprove  of  accumulation.  If  the 
Savings  Bank  depositor  saves  enough  to  pass  on  up  into 
the  class  of  large  and  independent  investors  and  finally 
to  enter  the  class  technically  known  as  "capitalists,"  our 
social  philosophers  withdraw  their  sympathy  and  respect 
from  him  and  denounce  him  because  he  is  rich.  Savings 
Banks  would  then  seem  to  be  useful  institutions  because 
they  are  vicious  only  up  to  a  certain  point. 

Savings  Banks  are  the  most  efficient  institutions  for 
aggregating  capital  which  we  possess.  That  is  the  most 
useful  function  which  they  perform,  when  we  regard 
them  from  the  standpoint  of  society,  not  of  the  individual 
depositor.  In  fact,  we  must  believe  that,  if  the  motives 
of  thrift  could  be  made  to  actuate  the  population  far 
more  widely  then  they  now  do,  resources  of  capital  could 
be  found  in  the  increased  savings  of  the  mass  of  the  popu- 
lation of  which  we  have  at  present  but  little  idea.  Sav- 
ings are  like  taxes.  If  you  want  big  results  you  must  look 
to  the  aggregation  of  millions  of  small  sums  from  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    179 

whole  population,  not  to  the  aggregate  of  a  few  big  sums 
from  the  millionaires. 

In  this  connection  the  movement  of  the  current  rate  of 
interest,  regarding  that  rate  as  a  stimulus  to  saving,  is 
a  very  interesting  and  important  phenomenon.  If  we 
knew  more  about  the  causes  of  the  fluctuations  of  the 
interest  rate  we  should  gain  a  deeper  insight  than  we 
now  possess  into  some  of  the  operations  of  the  industrial 
system;  especially  we  should  gain  a  text  which  we  very 
much  need  for  the  effects  of  legislation  and  taxes.  The 
rate  at  present  favors  the  borrower,  not  the  depositor. 
If  such  a  tendency  of  the  rate  was  a  result  of  an  accumu- 
lation of  capital  more  rapid  than  the  exhaustion  of  enter- 
prise it  would  no  doubt  be  advantageous.  It  would 
bring  about  a  reaction  which  would  produce  readjustments 
and  would  be  ultimately  healthful.  I  find  it  difficult  to 
conceive  of  an  increase  of  capital  in  excess  of  the  extension 
of  enterprise  under  the  circumstances  of  industry  and  of 
public  temper  which  characterizes  our  society.  The  fact 
that  the  interest  rate  is  as  low  here  as  in  western  Europe, 
or  even  lower,  seems  to  me  to  be  abnormal  and  even  ir- 
rational. It  seems  to  me  to  point  to  errors  of  legislation. 
Our  people  have  been  congratulating  themselves  for  two 
years  on  an  enormous  balance  of  trade  in  our  favor.  We 
have  had  large  crops  of  cereals  when  other  people  had 
small  ones,  and  so  we  have  sold  the  whole  at  high  prices. 
The  consequence  is  that  we  have  paid  our  debts,  have  got 
out  of  bad  times  into  good  ones,  have  dispelled  our  politi- 
cal anxieties,  and  have  capital  out  in  Europe;  but  when 
we  try  to  draw  home  our  credits  we  find  that  our  rate  of 
interest  falls.  Within  a  year  we  have  seen  it  fall  a  full 
point.  I  find  one  statesman  quoted  in  a  newspaper  as 
saying:  "If  present  conditions  continue,  it  looks  as  if  all 
the  gold  in  the  world  will  come  into  the  United  States." 
That  is  probably  the  most  grotesque  notion  that  could 
enter  anybody's  head.  It  seems  clear  that  the  fluctuation 
which  we  have  experienced  does  not  correspond  to  the 
normal  action  of  the  forces  which  should  produce  the  rate 


i8o  HISTORY  OF  THE  SAVINGS  BANKS 

of  interest,  and  that  the  effects  of  it  are  not  subject  for 
congratulation.  A  higher  rate  than  that  now  prevaihng 
would  give  tone  to  the  money  market.  It  would  be  a 
benefit  to  small  investors.  It  would  remove  perils  which 
threaten  speculation  and  would  lessen  the  dangers  of  dis- 
count banking.  It  would  be  a  benefit  to  enterprise  by 
giving  greater  steadiness  and  sobriety,  especially  as  to 
the  future.  It  would  restore  the  relation  which  should 
exist  between  a  new  country  and  old  ones.  How  can  things 
be  in  a  normal  and  healthful  condition  when  we  cannot 
earn  greater  interest  on  capital  in  a  new  country  than 
what  people  will  bid  for  it  in  old  ones? 

I  was  led  to  notice  the  rate  of  interest  because  I  was 
speaking  of  the  possible  increase  in  the  accumulation  of 
capital  which  might  be  produced  if  the  motives  of  saving 
could  be  stimulated  throughout  the  mass  of  the  people. 
By  the  side  of  the  facts  to  which  I  have  referred,  which 
are  sometimes  interpreted  as  showing  that  the  formation 
of  capital  at  present  outstrips  the  extension  of  enterprise, 
there  are  other  facts  which  show  enormous  demand  for 
capital  on  account  of  unprecedented  extensions  of  enter- 
prise. It  is  idle  folly  to  meet  these  phenomena  with 
wailings  about  the  danger  of  the  accumulation  of  great 
wealth  in  few  hands.  The  phenomena  themselves  prove 
that  we  have  tasks  to  perform  which  require  large  aggre- 
gations of  capital.  Moreover,  the  capital  to  be  effective 
must  be  in  few  hands,  for  the  simple  reason  that  there  are 
very  few  men  who  are  able  to  handle  great  aggregations 
of  capital.  This  is  also  the  reason  why  the  attempts  to 
execute  great  enterprises  by  the  State  or  municipality, 
that  is  by  elected  officers,  especially  in  a  democratic  re- 
public, are  sure  to  be  wasteful  and  comparative  failures. 
The  men  who  are  competent  to  organize  great  enterprises 
and  to  handle  great  amounts  of  capital  must  be  found  by 
natural  selection,  not  by  political  election.  It  is  plainly 
childish  to  attack  those  elements  of  a  case  which  are  es- 
sential to  it.  If  the  aim  is  to  establish  tests  and  guar- 
antees, or  regulations,  then  there  is  room  for  discussion. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    i8i 

but  it  is  evident  folly  to  say  that  we  want  a  certain  result 
and  then  to  say  that  we  will  not  consent  to  the  most  funda- 
mental conditions  of  what  we  want.  The  aggregation  of 
large  amounts  of  capital  in  few  hands  is  the  first  condition 
of  the  fulfilment  of  the  most  important  tasks  of  civili- 
zation which  now  confronts  us.  If,  therefore,  the  view 
which  I  have  suggested  is  correct,  that,  in  spite  of  some 
present  appearances  to  the  contrary,  there  is  to  be,  in  the 
near  future,  a  greatly  increased  demand  for  capital,  then 
a  great  increase  of  the  popular  desire  to  save  would  be 
contributory  to  the  present  needs  of  society, 

I  have  suggested  in  this  paper  that  the  Savings  Bank 
depositor  gets  an  education  and  development  of  character 
from  the  practice  of  saving.  He  gets  a  point  of  view  and 
a  way  of  looking  at  things  which  are  substantially  the 
same  as  those  of  all  capitalists.  The  seatsful  of  Savings 
Bank  depositors  whom  I  mentioned  at  the  outset  incurred 
the  ire  of  the  agitator  because  they  showed  this:  He  was 
addressing  poor  men  and  men  of  the  wages  class,  to  which 
they  belonged,  but  instead  of  responding  to  his  class  appeal, 
as  he  wanted  them  to  do,  they  showed  the  sentiments  of 
the  capitalist  class.  Hence  his  dissatisfaction  with  them. 
We  have  had  experience  of  the  political  value  and  impor- 
tance of  the  same  conservative  sentiments  and  property 
interests  of  the  small  capitalists.  It  is  a  matter  for  re- 
gret that  the  Savings  Bank  depositor  does  not  know  more 
about  the  investment  of  his  own  savings.  If  he  knew,  so 
to  express  it,  where  his  money  is,  how  it  is  being  used,  how 
the  interest  which  he  receives  is  won,  and  what  is  the 
nature  of  the  political  risks  and  perils  to  which  his  savings 
may  be  exposed,  the  social  and  political  consequences  would 
be  most  beneficial. 

I  once  also  heard  another  orator,  who  was  dilating  upon 
the  ills  of  life,  declare  that  the  great  cause  of  human  woe 
was  the  "devil  of  interest."  There  is  no  doubt  that  in- 
terest is  an  awful  devil.  Your  feeling  toward  this  devil, 
however,  depends  on  whether  you  are  working  for  him  or 
he  is  working  for  you.     If  you  are  working  for  him,  es- 


i82  HISTORY  OF  THE  SAVINGS  BANKS 

pecially  if  you  have  bound  yourself  to  terms  which  are 
imprudent,  beyond  your  strength,  and  full  of  gam.bling 
risk,  then  he  is  an  awful  taskmaster.  You  dare  not  eat, 
or  sleep,  or  play.  Pay  day  seems  to  come  every  other 
day.  Instead  of  winning  release  by  work,  you  may  see 
your  load  grow  bigger  and  bigger,  in  spite  of  all  you  do, 
untU  you  come  to  ruin.  Therefore,  when  you  are  going, 
to  work  for  him,  which  we  all  have  to  do  sometimes,  you 
must  be  sure  that  you  undertake  only  what  you  can  ac- 
complish within  the  conditions  in  which  you  find  yourself. 
But  if  the  devil  of  interest  is  working  for  you,  he  will  work 
while  you  eat,  and  sleep,  and  play,  and  while  you  work 
to  earn  more.  You  must  be  careful  to  have  him  well 
harnessed  and  to  give  him  proper  superintendence  and 
directions.  Then,  if  time  seems  to  you  to  slip  away 
rapidly,  and  if  old  age  comes  on  apace,  the  devU  of  interest 
wUl  give  you  the  only  consolation  you  can  get  for  your 
failing  powers.  When  you  turn  to  your  Savings  Bank 
book  you  will  see  that  your  capital  is  increasing  just  as 
rapidly  as  the  flight  of  time,  and  that  it  wUl  be  ready  to 
support  your  existence  when  your  ability  to  work  gives 
out.  I  have  spoken  about  the  power  and  beneficence  of 
capital  to  maintain  civilization;  this  last  is  its  power  and 
beneficence  to  guide  the  fate  and  sustain  the  happiness  of 
the  individual. 


SPECIAL    MEETING    CALLED    TO    ACT    ON    THE    STRANAHAN 

BILL 

A  special  meeting  of  the  Association  was  held  on  Wed- 
nesday, February  7,  1900,  to  determine  the  attitude  of 
the  m^embers  on  the  subject  of  the  taxation  of  mortgages 
and  the  passage  of  the  so-called  Stranahan  Bill,  then 
pending  in  the  Legislature.  Mr.  Geo.  W.  Wickersham,  of 
the  law  firm  of  Strong  &  Cadwallader,  New  York,  had  been 
employed  by  the  Executive  Committee  of  the  Association 
to  make  a  careful  analysis  of  the  bill  and  to  give  an  expert 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    183 

opinion  in  connection  with  the  proposed  law,  both  as  to 
its  constitutionality  and  as  to  the  workings  of  the  tax 
under  the  law  in  operation.  This  he  did.  A  very  inter- 
esting discussion  of  the  important  subject  followed,  par- 
ticipated in  by  Mr.  Chas.  A.  Miller,  the  legal  counsel  of 
the  Association,  Mr.  Chas.  L.  Stone,  and  Mr.  James 
McMahon. 

THE  RESOLUTIONS   ADOPTED 

The  following  resolution,  introduced  by  Andrew  Mills, 
was  adopted: 

Resolved,  That  this  Association  considers  the  bill  intro- 
duced by  the  joint  Committee  on  Taxation  and  Retrench- 
ment imposing  a  tax  upon  debts  secured  by  mortgage,  so 
far  as  it  applies  to  Savings  Banks,  is  a  measure  for  the 
taxation  of  the  savings  of  the  money  of  wage-earners  and 
persons  of  small  means  intrusted  to  the  care  of  the  Sav- 
ings Banks,  and  as  such  it  is  unalterably  opposed  to  the 
bUl. 

Resolved,  That  this  Association  now,  as  in  the  past, 
inflexibly  oppose  any  scheme  to  tax  the  fruits  of  the  in- 
dustry and  economy  of  those  persons  for  whose  protection 
Savings  Banks  have  been  established  and  fostered  in  this 
State. 

Resolved,  That  a  Committee  (the  number  to  be  de- 
termined) be  appointed  by  the  Chair  to  take  action,  in 
connection  with  The  Executive  Committee  of  this  Asso- 
ciation, in  effectively  opposing  the  passage  of  the  bill  re- 
ferred to  and  of  any  other  bill  the  effect  of  which  will  be 
to  tax  the  personal  property  in  the  hands  of  the  Savings 
Banks  of  this  State. 

HEARING  BEFORE   JOINT   LEGISLATIVE   COMMITTEE 

A  hearing  was  had  before  the  Senate  and  Assembly 
Committees  on  Taxation  and  Retrenchment  in  the  Sen- 
ate Chamber,  Capitol,  Albany,  on  the  13th  of  February, 


i84  HISTORY  OF  THE  SAVINGS  BANKS 

1900,  upon  the  bill  entitled  "An  act  to  provide  adequate 
revenue  for  the  support  of  the  State  Government  otherwise 
than  by  Direct  Taxation  of  the  assessed  valuations  of 
Real  and  Personal  property  and  for  a  more  equitable 
distribution  of  the  burdens  of  Taxation."     (Senate  No. 

397-) 

There  were  present: 

Senators  Krum  (Chairman),  Higgins,  Foley, and  Cullen, 
and  Assemblymen  Degraw  (Chairman),  Guilder,  Roberts, 
Treat,  and  Farrell. 

Representing  the  Savings  Banks  were:  Messrs.  Stone, 
Chase,  AUiger,  C.  E.  Sprague,  Meserole,  DeWitt,  H.  W. 
Sprague,  Tibbetts,  Miller,  Hurlbut,  Knapp,  Hanaman, 
Mills,  Rainey,  Sturges,  McMahon,  King,  Conklin,  Wentz, 
and  Donaldson. 

The  principal  address  in  opposition  to  the  proposed 
law  was  made  by  Mr.  Geo.  W.  Wicker  sham  (afterward 
Attorney- General  during  the  administration  of  President 
Roosevelt). 


CHAPTER  VII 


Seventh  Annual  Convention — Retirement  of  President  John  Har- 
sen  Rhoades  after  SLx  Years  of  Distinguished  and  Valuable 
Service — Death  of  Samuel  R.  Rainey,  Chairman  of  the  Execu- 
tive Committee — Appropriate  Action  Taken — Address  of 
Hon.  Carroll  D.  Wright,  of  Washmgton,  on  "Savings  Insti- 
tutions as  a  Social  Force" — Col.  Thomas  Wentworth  Hig- 
ginson's  Illuminating  Address  on  the  "Aristocracy  of  the 
Dollar" — Remarks  of  Hon.  Wheeler  H.  Peckham. 


1 


"AHE  Seventh  Annual  Convention,  which  was  held 
on  Friday,  May  ii,  1900,  at  32  Nassau  Street, 
New  York,  was  marked  by  the  retirement  of  Mr. 
John  Harsen  Rhoades  as  President,  an  ofSce  which  he  had 
filled  with  distinguished  ability  since  the  formation  of  the 
Association  six  years  before. 

FAREWELL  ADDRESS   OF   PRESIDENT  RHOADES 

In  his  opening  address  President  Rhoades  said : 

It  is  now  about  twenty  years  since  a  concerted  move- 
ment was  made  by  some  of  the  officers  of  the  Savings 
Banks  of  this  State  to  protect  themselves  against  un- 
wise measures  introduced  in  the  Legislature,  and  to 
inaugurate  wise  measures  not  only  for  the  protection 
of  depositors  but  toward  the  sustaining  and  the  up- 
building of  the  system  of  savings  in  this  State,  upon 
which  the  prosperity  of  the  mass  of  our  population  so 
much  depends. 

At  the  outset  of  this  movement  there  were  on  deposit  in 
the  Savings  Banks  of  the  State  of  New  York  $353,000,000. 
There  were  on  January  i,   1900,  on  deposit  the  vast 

i8s 


i86  HISTORY  OF  THE  SAVINGS  BANKS 

sum  of  $887,000,000 — an  increase  in  twenty  years  of 
$534,000,000. 

After  years  of  unorganized  effort  on  the  part  of  a  few 
bank  officers,  during  which  much  bad  legislation  was  pre- 
vented, but  very  little  good  legislation  created,  it  was 
found  impossible  without  organization  to  accompKsh  all 
that  we  aimed  at;  and  in  the  year  1894  we  for  the  first  time 
organized  ourselves  into  a  body,  and  since  then  have 
worked  together  harmoniously;  our  desire  being  solely  to 
protect  and  maintain  the  system  of  eleemosynary  banks 
for  the  purpose  of  fostering  thrift  among  the  working  peo- 
ple, and  so  far,  having  been  guided  by  philanthropic  aim 
and  conservative  method,  we  have,  I  firmly  believe,  estab- 
lished ourselves  not  only  in  the  confidence  of  the  people 
of  the  State,  but  also  in  the  confidence  of  the  legislators, 
and  our  influence  for  good  has  thus  become  the  stronger 
and  our  counsel  of  more  weight  and  character  than  would 
otherwise  have  been  the  case. 

So  long  as  the  motive  of  our  action  remains  the  same, 
so  long  will  this  Association  prove  a  benefit  to  ourselves 
as  officers,  and  a  benefit  to  the  community  which  we  serve. 

The  work  of  the  past  year  will  be  told  in  the  report  of 
the  Executive  Committee.  It  has  been  important  and  of 
a  character  to  denote  our  usefulness.  The  most  serious 
effort  made  in  the  Legislature  to  affect  our  deposits  has 
been  in  the  character  of  taxation.  The  whole  subject  of 
the  proper  methods  of  taxation  will  always  be  a  perplexing 
and  a  difficult  one  to  solve,  largely  owing  to  the  natural  re- 
sistance of  those  affected  when  ever  their  interests  are  ap- 
proached and  an  additional  burden  is  proposed  to  be  laid 
upon  them. 

I  have  always  believed  that,  with  a  system  of  taxation 
wisely  conceived  and  honestly  enforced,  it  might  be  wise 
and  proper  to  have  a  light  tax  laid  upon  the  earnings  of 
the  working  classes;  but  it  would  be  a  gross  injustice  to  do 
this  in  the  absence  of  a  just  enforcement  of  the  taxes  upon 
all  interests  alike.  If  the  corporation,  individual,  the  life 
insurance  company,  the  building  and  loan  association,  and 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    187 

the  real  estate  owner  are  all  to  be  equally  taxed  in  their 
fair  proportion,  then  I  do  not  believe  that  the  Savings 
Bank  depositor  would  object  to  paying  his  fair  proportion 
of  the  tax  so  collected;  but  he  will  never  willingly  consent, 
nor  ought  we  as  his  representatives  be  willing  to  consent,  to 
the  imposition  of  a  tax  upon  the  wage-earner  so  long  as  our 
tax  laws  exist  as  they  do  to-day,  and  when  such  glaring 
injustice  is  consented  to  as  now  applied  to  the  collection 
of  personal  taxes. 

It  is  a  fact  easily  proven  that  the  widow,  the  orphan,  and 
the  women  of  our  State  pay  the  larger  share  of  the  personal 
taxes  collected,  and  the  argument  made  by  the  average 
legislator,  even  if  true  (and,  in  the  main  it  is  not  true),  that 
the  Savings  Banks  should  be  taxed  because  of  moneys  de- 
posited by  those  who  are  not  properly  the  poor  or  the  work- 
ing classes,  is  still  a  false  argument  in  its  results,  for  the 
reason  that,  if  such  taxes  were  enforced,  the  moneys  com- 
plained of  would  be  withdrawn  and  the  burden  would  rest 
upon  those  the  least  able  to  bear  it,  as  is  the  case  at  the 
present  time  in  regard  to  the  enforcement  of  personal 
taxes. 

It  was  said,  and  said  repeatedly  in  the  Legislature  during 
the  past  winter,  that,  if  a  mortgage  tax  were  enforced,  the 
burden  of  such  tax  would  be  borne  by  the  lender  of  the 
money,  when  it  is  a  known  fact,  which  experience  has 
proven,  that  such  a  tax  would  be  borne  solely  by  the  bor- 
rower. The  rate  of  interest  would  have  advanced  one 
half  of  one  per  cent.,  and  the  exemption  of  mortgages  from 
liability  to  further  taxation  would  have  reduced  the  aver- 
age rate  upon  them  one  half  of  one  per  cent.,  or,  to  state  it 
in  another  way,  the  tax  would  have  raised  the  rate,  the 
exemption  clause  would  have  reduced  it,  but,  in  either  case, 
the  burden  of  the  tax  would  be  borne  by  the  borrower. 

In  California,  where  mortgages  have  been  taxed  for 
years,  and  on  a  fairer  basis  than  was  proposed  in  this 
State  (for  the  borrower  is  allowed  to  deduct  his  mortgage 
from  the  valuation  of  his  property,  and  the  lender  is  com- 
pelled to  pay  his  tax  upon  the  mortgage),  experience  has 


i8S  HISTORY  OF  THE  SAVINGS  BANKS 

shown  by  facts  which  have  been  proven  that  the  borrower 
not  only  is  compelled  to  pay  the  tax,  but  at  least  one 
quarter  of  one  per  cent,  in  addition,  to  cover  the  demand 
made  upon  the  lender  for  the  tax  upon  the  mortgage. 

In  a  pamphlet  by  Carl  C.  Plehn  this  whole  subject  has 
been  gone  into  with  a  great  deal  of  care,  and  the  results  of 
his  investigation  have  been  accepted  in  monetary  circles 
in  that  State  as  being  correct  in  every  way.  In  conclud- 
ing his  article,  he  uses  the  following  language: 

"It  is  clear  from  our  investigation  that  the  constitutional  method 
of  taxing  mortgages  has  encountered  the  same  difficulties  which 
rendered  the  enforcement  of  a  usury  law  impossible.  A  law  aimed 
especially  to  help  the  borrower  at  the  expense  of  the  lender  is  from 
its  very  inception  unfair;  in  fact,  it  injures  the  borrower  instead  of 
helping  him  by  narrowing  the  supply  of  capital  offered  to  him  and 
raising  the  rate  of  interest.  It  injures  the  business  community 
by  tolerating  the  use  of  roundabout  and  expensive  methods  to 
accomplish  simple  things.  It  lessens  the  respect  for  government 
and  all  liabihty  by  compelling  men  to  resort  to  underhand  devices 
to  accomplish  ends  which  of  themselves  are  perfectly  just  and 
honorable.  The  method  of  taxing  mortgages  is  entirely  unscien- 
tific, and,  from  the  point  of  view  of  the  general  theory  of  taxation, 
it  is  easy  to  see  why  it  has  failed  to  work  well." 

Taxes,  to  be  effective,  can  only  be  collected  from  profit 
or  income,  and,  in  my  judgment,  should  be  raised  from 
real  estate,  corporations,  through  licenses,  and  the  like. 
It  is  those  who  actually  earn  the  income  who  should  pay 
the  tax.  The  investor  and  capitalist  pay  it  indirectly 
through  reduced  dividends,  or  through  being  compelled 
to  loan  money  at  a  less  rate  upon  real  estate  loans,  owing 
to  their  freedom  from  liability  to  taxation. 

If  all  the  States  in  the  Union  would  enforce  proper  taxa- 
tion upon  corporate  property  of  all  kinds,  that  portion  of 
the  population  which  are  possessed  of  property  in  con- 
siderable amount  or  otherwise  would  be  compelled  to  pay 
their  share,  which  cannot  be  collected  justly  and  fairly  in 
any  other  way;  but  we,  as  Savings  Bank  officers,  must  not 
overlook  the  serious  fact  that,  with  over  one  thousand  mil- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    189 

lions  of  dollars  of  assets  in  our  hands,  and  deposits  steadily 
increasing,  the  temptation  and  the  desire  of  the  Legisla- 
ture to  reach  these  deposits  through  taxation  will  be  con- 
stant and  increasing,  and  the  duty  lies  upon  each  and  all 
of  us  to  stand  together  and  to  resist  these  attacks  not  with 
protest  only,  but  with  solid  argument  as  well. 

Each  recurring  year  brings  with  it  our  sorrows,  and  we 
miss  here  to-day  the  presence  of  more  than  one  who  has 
met  with  us  in  the  past  and  who  has  passed  on  to  the  activi- 
ties of  another  life;  but  none  of  these  can  we  miss  more 
than  the  Chairman  of  our  Executive  Committee,  Mr. 
Samuel  R.  Rainey,  who  was  not  only  a  tower  of  strength 
to  this  Association,  but  one  who  had  endeared  himself  to 
many  of  us.  For  me  among  all  the  pleasant  memories 
which  the  existence  of  this  body  has  created,  and  among 
all  the  friends  which  it  has  made  for  me  I  will  remember 
that  through  this  Association  he  became  my  friend,  and 
never  forget  the  pleasant  hours  and  days  we  passed 
together.  It  is  for  the  creation  of  such  memories  as 
these,  if  no  other  reason  existed,  that  we  should  meet 
together  as  officers  of  banks  from  time  to  time  and  draw 
help  and  inspiration  from  one  another  for  the  daily  work 
of  life. 

And  now,  gentlemen,  I  must  end  what  I  have  to  say, 
and,  in  the  ending,  and  upon  my  retirement  from  the  dis- 
tinguished office  as  President  of  your  body,  say  to  you 
how  much  I  appreciate  your  kindness  to  me,  how  much  I 
have  leaned  upon  each  and  all  of  you  for  confidence  and 
support,  how  well  rewarded  I  have  been  by  the  harmony 
which  has  characterized  our  action,  and  how  deeply  I 
cherish  the  acquaintance  and  the  friendship  of  those  who 
constitute  this  body.  While  no  longer  your  President, 
I  remain  your  associate  and  co-worker,  and  bid  your  new 
President,  whom  you  are  about  to  elect.  Godspeed  in  the 
work  we  have  in  hand.  He  will  honor  the  high  office  to 
which  he  is  called,  and  you  wiU  honor  him  in  bestowing  it 
upon  him,  and  I  ask  for  him  the  same  loyal  support  you 
have  also  accorded  to  me.     The  Savings  Banks  Associa- 


igo  HISTORY  OF  THE  SAVINGS  BANKS 

tion  of  this  State  must  go  on  with  its  work,  and  the  need 
of  this  organization  will  increase  year  by  year.  Let  us, 
therefore,  stand  by  it  loyally,  faithfully,  earnestly,  truly, 
and,  standing  by  it,  let  us  stand  to  the  end ! 

DEATH  OF   SAMUEL  R.   RAINEY 

It  was  with  feelings  of  unfeigned  sorrow  that  the  Execu- 
tive Committee  was  called  upon  to  preface  its  report  with 
the  announcement  of  the  death  of  its  Chairman,  Samuel 
R.  Rainey,  of  Hudson,  which  occurred  at  his  home  March 
1 7th.     The  Committee  said ; 

"His  devotion  to  the  interests  of  the  Savings  Banks  can- 
not be  better  described  than  by  the  words  of  the  President 
of  the  Association  in  his  last  annual  address:  'Watchful, 
earnest,  intelligent,  and  faithful,  your  officers  have  leaned 
on  him  for  counsel  and  direction,  and  have  recognized  that 
largely  to  his  effort  is  due  whatever  of  success  has  crowned 
our  efforts  during  the  past  year.' " 

Shortly  after  Mr.  Rainey's  death  the  Committee  met 
and  adopted  the  following  resolutions,  a  copy  of  which 
was  sent  to  every  member  of  the  Association: 

It  is  with  deep-felt  sorrow  that  the  members  of  the  Exec- 
utive Committee  learn  of  the  death  of  their  associate  and 
Chairman,  Samuel  R.  Rainey.  Mr.  Rainey  has  been  a 
member  of  the  Executive  Committee  ever  since  its  forma- 
tion, and  two  years  ago  was  elected  Chairman,  which  posi- 
tion he  held  at  the  time  of  his  death. 

From  the  first  he  evinced  a  great  interest  in  the  Savings 
Banks  Association,  and  to  his  untiring  and  persistent  ef- 
forts is  largely  due  the  successful  work  we  have  been  able 
to  accomplish. 

He  was  a  man  whose  honesty  of  purpose  was  never 
doubted,  whose  personal  character  was  beyond  reproach, 
while  his  genial  personality  endeared  him  to  all  with  whom 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    191 

he  came  in  contact.  Not  only  has  this  Committee  lost  a 
most  efficient  head,  but  each  member  a  true  and  loyal 
personal  friend,  and  the  Association  one  of  its  most  in- 
fluential members.  His  death  has  created  a  void  which 
will  be  hard  to  fill,  and  his  memory  wiU  abide  with  us 
during  our  lives. 

Resolved,  That  this  Committee  extends  to  the  family  of 
our  deceased  friend  its  sincere  and  heartfelt  sympathy 
in  this  hour  of  their  great  sorrow. 

Resolved,  That  this  minute  be  entered  upon  our  records 
and  a  copy  suitably  engrossed  sent  to  the  family  of  our 
associate,  and  the  Secretary  requested  to  notify  the  mem- 
bers of  the  Association  of  the  death  of  Mr.  Rainey  and  the 
action  taken  thereon. 

THE   STRANAHAN  BILL 

The  Executive  Committee  made  report  of  the  efforts  to 
defeat  the  so-called  Stranahan  Bill  which  imposed  a  tax 
of  one  half  per  cent,  upon  all  debts  secured  by  mortgage 
on  real  property  situated  within  this  State;  also  that  the 
bill  making  the  bonds  of  the  Chicago  &  Alton  Railroad  a 
legal  investment  for  Savings  Banks  had  received  the  sanc- 
tion of  the  Committee,  as  the  bonds  were  considered  a 
safe  investment,  and  the  bill  contained  an  amendment  cor- 
recting an  error  in  the  bill  passed  at  the  last  session  of  the 
Legislature.     The  bill  subsequently  became  a  law. 

RETIREMENT  OF  JOHN  HARSEN  RHOADES  AS  PRESIDENT 

The  fact  having  become  known  that  President  John 
Harsen  Rhoades  had  for  personal  reasons  positively  de- 
clined to  permit  the  use  of  his  name  further  in  connection 
with  the  office  of  President  of  the  Association,  which  office 
he  had  for  so  many  years  filled  with  distinguished  ability, 
the  Association  took  appropriate  action  at  this  Conven- 
tion with  reference  to  his  retirement. 


192  HISTORY  OF  THE  SAVINGS  BANKS 

Mr.  Sturges  said:  The  necessary  retirement  of  Mr. 
John  Harsen  Rhoades  from  the  Presidency  of  this  Associ- 
ation has  caused  such  profound  regret  that  I  feel  con- 
strained to  speak  a  few  words  on  the  matter.  I  know  that, 
as  compared  with  the  whole  membership,  but  few  can 
fully  realize  the  important  services  Mr.  Rhoades  has 
rendered  this  Association  during  the  past  five  years. 
The  Executive  Committee  especially,  who  have  been  in- 
timately associated  with  him  in  that  work,  will  unquali- 
fiedly testify  to  their  high  regard  for  what  he  has  done. 
Therefore,  in  order  to  give  expressions  to  a  desire  that  I 
believe  is  felt  here  by  all  my  associates,  I  feel  that  a  suit- 
able recognition  should  be  made  of  the  services  Mr. 
Rhoades  has  rendered  to  the  Association  by  his  devotion 
to  its  interests  and  the  valuable  results  that  have  been 
accomplished  through  his  efforts.  As  he  retires  from  the 
activities  of  the  office  which  he  has  filled  so  faithfully 
and  efficiently,  he  will  at  least  know  that  he  carries  with 
him  the  esteem,  the  friendship,  and  the  best  wishes  of  those 
with  whom  he  has  been  connected  in  this  Association, 
and  I  beg  to  submit  the  following  preamble  and  resolution : 

Whereas,  Mr.  John  Harsen  Rhoades  having  decided 
to  retire  from  the  Presidency  of  the  Savings  Banks  Asso- 
ciation through  impaired  health,  after  having  faithfully 
performed  the  duties  of  that  office  for  the  past  five 
years. 

Resolved,  That  this  Association  expresses  to  Mr.  Rhoades 
its  regret  at  his  retirement  and  its  full  appreciation  of  the 
valuable  services  he  has  rendered  and  the  untiring  devo- 
tion shown  by  him  to  the  interests  of  the  Savings  Banks 
in  this  State. 

Resolved,  That  this  preamble  and  resolution  be  entered 
in  full  on  the  minutes  of  the  proceedings  of  this  Asso- 
ciation. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    193 

Mr.  McMahon :  I  second  the  resolution,  which  has  been 
presented  by  Mr.  Sturges,  in  behalf  of  the  Executive 
Committee  and  in  behalf  of  the  whole  Association.  I  can 
only  add  to  what  is  expressed  in  the  resolution  that  I  have 
been  connected  with  the  Association  from  its  formation, 
that  for  many  years  prior  to  its  organization  I  was  asso- 
ciated with  Mr.  Rhoades  in  visits  to  Albany  in  connection 
with  Savings  Bank  matters  in  respect  to  legislation,  and 
I  confess  that  the  Association,  to  my  mind,  owes  its  origin 
and  formation  to  Mr.  Rhoades.  In  going  to  and  from 
Albany  it  was  constantly  his  subject  of  conversation, 
the  importance  of  such  an  organization  and  the  good  that 
would  result  from  it,  and  all  the  early  meetings,  which 
were  convened  by  Mr.  Rhoades,  were  held  in  different 
banks — many  of  them  in  the  board  room  of  my  bank,  and 
I  think  for  the  first  two  years  the  Association  held  all 
of  its  meetings  there.  Therefore  I  can  the  more  intelli- 
gently testify  to  the  great  ability  and  the  untiring  zeal  and 
effort  of  Mr.  Rhoades  in  the  formation  of  this  Association. 
There  are  very  few  members  who  are  aware  of  the  amount 
of  labor  that  falls  to  the  position  of  the  President.  It  is 
not  alone  in  respect  to  legislation,  but  he  has  letters  to 
answer  from  all  over  the  country,  statistical  information 
required,  and  so  many  things  that  it  has  been  a  wonder 
to  me  that  Mr.  Rhoades  has  been  able,  with  the  multi- 
plicity of  duties  he  has  had  to  perform,  to  give  it  the  at- 
tention which  he  has  given. 

The  resolutions  introduced  by  Mr.  Sturges,  and  sec- 
onded by  Mr.  McMahon,  were  unanimously  adopted. 

MR.   rhoades'   reply 

Mr.  President,  I  feel  greatly  moved  at  this  cordial  ex- 
pression on  your  part  of  appreciation  for  what  little  I  have 
done  for  a  work  which  we  are  all  engaged  in  alike.  Hap- 
pily for  me,  and  happily  for  you,  this  work  is  one  which 
counts  not  for  dollars  in  our  own  pockets,  but  for  the  good 
of  the  community,  and  no  man's  life  is  well  rounded  out 


194  HISTORY  OF  THE  SAVINGS  BANKS 

unless  he  can  look  back  and  feel  that  he  has  done  some- 
thing for  his  fellowman.  I  regard  the  work  that  we  are 
doing  as  of  the  utmost  value  in  its  character,  so  far  as  our 
fellowmen  are  concerned,  because  at  the  bottom  of  all 
prosperity,  at  the  bottom  of  all  that  is  good  in  this  world, 
is  the  encouragement  of  thrift  among  the  masses  of  our 
people.  I  want  to  say  to  you  now,  gentlemen,  that  the 
work  that  I  have  done  was  done  from  a  sense  of  duty.  I 
count  the  task  but  light.  What  I  have  gained  is  to  me  of 
a  far  greater  value,  and  will  remain  to  me  as  long  as  I 
live,  and  that  is  the  knowledge  that  I  have  created  friends 
in  this  Association  which  are  very  dear  to  me.  I  shall 
continue  to  know  you  until  life  is  ended,  and  it  is  that, 
gentlemen,  which  gives  me  the  most  profound  satisfaction 
at  this  hour  of  my  retirement  from  the  high  office  of 
President  of  this  body.  I  speak  of  this  office  as  a  high 
office,  gentlemen,  for  it  is  a  high  office.  Any  man  who 
stands  here  representing  this  body  of  men  who  are  doing 
the  work  you  are  doing,  and  who  are  controlling  money 
which  has  rolled  up  to  over,  as  I  have  said  to-day,  a 
thousand  million  dollars,  and  who  stands  here,  as  your 
representative,  to  protect  that  money  from  unjust  attack 
and  from  dishonest  handling,  or  from  the  breaking  down 
of  a  system  which  has  gathered  it  together,  is  doing  a 
grand  work,  and  it  is  a  high  office  which  he  holds.  I  charge 
you,  therefore,  that,  upon  my  retirement,  so  long  as  you 
represent  and  remain  connected  with  the  Savings  Banks 
of  this  State,  so  long  as  the  banks  you  represent  hold  fast 
to  this  Association,  you  will  be  doing  the  best  thing  that 
you  can  do  to  protect  your  banks  and  their  depositors. 
Years  of  experience  have  taught  me  the  necessity  of  an 
organization  of  this  kind,  and,  as  the  years  go  on,  the 
necessity  will  grow  greater.  There  is  no  way  that  the 
Savings  Bank  system  of  this  State  can  be  maintained  in 
its  purity  and  in  its  integrity  unless  we,  its  officers  and 
trustees,  stand  together  as  one  man,  resisting  every- 
thing that  is  wrong  and  holding  to  everything  that  is 
right. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    195 

Subsequently  a  suitable  testimonial  was  presented  to 
the  retiring  President,  the  members  contributing  thereto 
mdividually. 

ADDRESS  OF  HON.  CARROLL  D.  WRIGHT 

On  the  subject,  "Savings  Institutions  as  a  Social 
Force,"  Mr.  Wright  said:  The  Savings  Banks  Association 
of  the  State  of  New  York  is,  as  I  understand  it  from  the 
statement  of  your  President,  an  active,  forceful,  and  val- 
uable agent  in  fostering  the  best  interests  of  your  deposi- 
tors. The  best  interests  of  Savings  Bank  depositors 
comprehends  a  variety  of  measures  and  means,  but  the 
chief  means  of  securing  these  best  interests  is  in  providing 
absolute  safety  for  investments.  With  safety  secured, 
savings  institutions,  under  whatever  name  they  may  be 
chartered,  constitute  one  of  the  most  active  forces  in  pre- 
serving a  high  social  standard ;  without  that  security,  such 
institutions  may  become  a  social  menace.  It  is  fortunate 
that  in  this  country,  as  a  general  rule.  Savings  Banks  have 
secured  the  confidence  of  the  public,  and  hence  constitute 
one  of  the  most  active  social  forces.  The  enormous  trans- 
actions, as  given  by  money  values,  convince  one  at  the 
start  that  the  reliance  of  the  public  upon  such  institutions 
has  been  very  great.  Savings  Banks  are  the  product  of 
this  century.  Their  development  has  been  within  the 
last  fifty  years.  They  had  their  birth  in  the  old  country 
in  the  very  last  years  of  the  eighteenth  century.  The  first 
organization  of  which  there  is  any  record  was  efifected  in 
this  City  of  New  York,  November  29,  1816.  The  first  in- 
corporated Savings  Bank  was  in  Boston  December  13th  of 
the  same  year,  beginning  its  business  in  the  spring  of  18 17. 
The  Savings  Banks  of  Great  Britain  did  not  have  the 
sanction  and  protection  of  law  at  that  time;  so  our  own 
country  anticipated  the  mother  country  in  giving  to  this 
interest  legal  protection.  Savings  Banks,  as  you  weU 
know,  are  not  the  usual  depositories  for  the  rich. 

The  little  nestegg  of  the  widow  and  orphan  is  found 


196  HISTORY  OF  THE  SAVINGS  BANKS 

there.  This  character  of  deposits,  on  the  whole,  consti- 
tutes fifty  per  cent,  of  the  total  amount. 

Small  depositors  in  Savings  Banks  are  not,  as  a  rule,  the 
men  who  make  violent  complaints  against  the  banks  or 
against  the  Government.  They  know  that  banks  are 
the  great  debtors  and  not  the  great  money  owners.  They 
know  that  a  bank  owns  no  money  of  itself,  that  it  is  the 
debtor  of  its  depositors;  that  it  holds  the  money  of  the 
people,  no  matter  what  the  form  of  the  bank  may  be.  The 
stability  of  the  banks,  therefore,  is  of  the  greatest  concern 
to  the  people  at  large,  who  are  interested  in  them.  They 
realize  that  the  stability  of  the  debtor  is  the  stability  of 
the  country  itself. 

A  man  who  has  money  in  his  pocket  or  in  the  Savings 
Banks  usually  has  an  interest  in  the  stability  of  the  Gov- 
ernment, because  that  little  amount  which  is  to  his  credit 
is  only  safe  when  the  debtor  is  safe.  He  has  an  impor- 
tance far  beyond  the  man  who  has  not  such  deposit,  be- 
cause he  has  an  interest  in  all  that  pertains  to  the  welfare 
of  the  country  at  large. 

Somebody  has  said  that  a  wife  and  children  are  God's 
policemen.  It  may  well  be  said  that  a  man  who  has  been 
careful  and  economical  enough  to  put  by  some  part  of  his 
earnings,  thus  becoming  a  real,  substantial  part  of  the  whole, 
is  one  of  the  Government's  free  policemen:  for  he  will  see 
to  it  that  nothing  is  done  to  invalidate  the  stability  of  the 
debtor  to  whom  he  looks  for  the  safety  of  his  little  savings. 

It  must  be  recognized  that  property  is  the  real  basis  of 
social  stability — not  only  that  it  is  the  source  of  family 
comfort  and  happiness  of  the  family  even,  but  that  it 
lies  at  the  very  foundation  of  the  causes  which  secure  the 
perpetuation  of  the  human  race. 

The  Savings  Banks  are  schools  of  patriotism. 

It  has  long  been  held  that  savings  constitute  one  of  the 
surest  means  of  avoiding  some  of  the  catastrophes  that 
come  to  society.  It  must  be  admitted  by  every  one  who 
has  given  any  attention  to  the  subject  that  social  welfare 
depends  upon  industrial  welfare. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    197 

Dr.  Chalmers  said  that:  "The  possession  of  a  capital, 
and  that  not  a  very  great  one,  by  each  individual  laborer, 
or  rather  by  each  of  a  considerable  number  of  laborers, 
would  reverse  the  character  of  the  negotiation  entirely. 

"Every  intelligent  employer  would  rather  have  a  well- 
to-do  class  of  employees,  well-paid  and  with  money  at 
interest,  than  a  pauperized  and  ill-paid  force, 

"Save  wisely,  so  as  to  be  able  to  spend  judiciously  in 
a  time  of  need  which  wiU  probably  be  greater  than  that  of 
the  present."  This  is  the  true  essence  of  the  principle 
of  the  savings  institutions,  and  when  society,  when  the 
wage- working  members  of  it,  understand  the  power  of 
postponing  consumption,  they  will  more  readily  be  con- 
vinced of  the  necessity  of  saving  to-day. 

The  economist  makes  a  great  mistake,  however,  in 
contending  that  all  welfare  is  the  result  of  savings.  If 
every  man  saved  something  of  his  current  income,  wore 
one  pair  of  shoes  where  he  now  wears  two,  business  itself 
would  become  stagnant.  It  is  not  in  penuriousness  that 
saving  exists.  Penuriousness  could  not  of  itself  create 
capital;  it  is  that  wise  thrift  which  postpones  consumption, 
which  saves  to-day  in  order  to  earn  the  privilege  of  spend- 
ing to-morrow.  In  this  lies  the  true  economic  principle  of 
society  and  of  industry.  Capital  is  in  a  sense  accumulated 
savings,  but  it  is  accumulated  savings  constantly  being 
used,  worked  over,  expended.  Capital  without  activity 
is  sand;  it  has  no  value.  It  must  be  productive,  and  thus 
productively  invested.  Idle  capital  is  a  menace.  Ac- 
tive capital  secures  the  safety  of  the  community.  The 
great  accumulations  of  the  Savings  Banks  of  the  country 
would  be  of  no  account  if  held  in  the  vaults  of  the  insti- 
tutions. It  is  because  these  savings  are  sent  out  in  a 
thousand  directions — in  building  homes,  in  loans  upon 
great  industrial  establishments,  for  the  conduct  of  enter- 
prise, and  everything  that  bears  a  relation  to  the  activities 
of  the  community — that  their  power  is  felt  and  their 
force  is  secured.  Every  man  who  participates  in  this 
activity,  even  to  the  extent  of  one  dollar,  is  helping  society 


198  HISTORY  OF  THE  SAVINGS  BANKS 

to  a  greater  and  healthier  prosperity.  So  we  see  that  the 
Savings  Banks  exercise  not  only  a  social  force  as  such,  but 
that  they  have  a  great  moral  effect  on  the  conduct  of 
society.  In  great  crises  they  help  to  save  property  from 
destruction. 

In  the  year  1892,  the  year  before  the  last  depression, 
the  average  amount  due  each  depositor  in  the  Savings, 
Banks  of  the  country  was  $358.20;  in  1893,  $369.55;  in 
1894,  $365.86;  a  decrease  of  less  than  $4,  while  in  1895 
the  amount  rose  to  $371.36;  in  1896,  to  $376.50;  in  1897, 
to  $372.88;  in  1898,  to  $383.54;  larger  than  any  preceding 
year  in  the  history  of  the  Savings  Banks,  while  in  1899  it 
was  $393.13,  larger  than  at  any  other  period.  Thus  the 
saving  process  went  on  through  the  whole  industrial 
depression  existing  from  1893  to  the  latter  part  of  1898. 
This  shows  the  habit  of  thrift,  and  that  adverse  circum- 
stances do  not  interfere  with  it  to  any  appreciable  degree. 
One  may  draw  some  arguments  from  all  this  which  bear 
especially  upon  a  very  popular  statement  that  finds  lodge- 
ment in  many  minds  at  the  present  time,  namely,  that  the 
rich  are  growing  richer  and  the  poor  poorer.  If  this 
statement  were  true  the  statistics  I  have  quoted  would  not 
show  the  results  stated.  If  it  were  true  there  would  be  a 
constant  decline  not  only  in  the  amount  of  deposits  but 
necessarily  in  the  average  due  each  depositor.  All  the 
collateral  facts  show  that  the  statement  is  not  true.  We 
know  that  the  rich  are  growing  richer;  we  know  that  more 
people  are  growing  rich  than  formerly.  Now,  with  these 
two  statements  acknowledged,  if  wealth  were  stationary  the 
popular  cry  would  be  true;  but  wealth  is  not  stationary, 
it  is  constantly  increasing,  so  that  the  true  statement  is 
that  while  the  rich  are  growing  richer  and  more  people 
are  growing  rich,  the  poor  are  growing  better  off.  We  may, 
as  philosophers  or  as  economists,  discuss  the  question  as 
to  whether  the  poor  are  getting  their  share  of  the  increased 
wealth,  but  we  cannot  argue,  if  we  be  honest,  that  they 
are  growing  poorer.  We  must  admit  that  they  are  gain- 
ing constantly  in  every  direction,  not  only  in  personal, 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    199 

individual  accumulations,  but  in  the  comforts  and  the 
surroundings  which  help  to  make  their  standard  of  life 
higher  than  at  any  previous  time.  With  this  improved 
condition  it  is  gratifying  to  recognize  the  growth  of 
Savings  Banks;  to  recognize  the  social  force  which  comes 
from  their  existence,  in  their  making  men  better,  and  in 
providing  them  with  means  for  future  consumption,  in 
aiding  them  to  carry  their  families  over  periods  of  stress 
and  depression.  Now,  with  this  great  social  force  in  ex- 
istence, the  men  who  are  most  interested  in  it  have  a 
right  to  demand  from  your  hands  and  from  the  hands  of 
all  who  are  conducting  the  affairs  of  the  great  savings 
institutions  of  the  country  the  very  best  and  the  most 
devoted  attention  to  the  safety  of  the  accumulations. 
You  know  well  the  power  of  law  in  these  matters,  but  you 
know  well  that  the  power  of  law  is  nothing  alongside  of 
reckless  management.  Wherever  Savings  Banks  have 
failed  it  has  been  through  the  cupidity  of  the  managers 
in  making  investments  which  apparently  would  draw  a 
large  rate  of  interest.  Every  business  man  knows  that  a 
large  rate  of  interest  means  an  insecure  basis  of  invest- 
ment. The  depositors  of  the  Savings  Banks  of  the  United 
States  are  content  with  a  low  rate.  It  is  the  safety  of  the 
deposit  itself  to  which  they  look  for  their  own  welfare, 
and  in  this  lies  the  real  social  force  of  the  banks  them- 
selves. Any  other  principle,  any  reckless  management, 
any  desire  to  pay  large  rates  of  interest  instead  of  insuring 
the  security  of  the  deposit  itself,  constitutes  the  Savings 
Banks  not  a  social  force  but  a  social  menace.  As  I  look 
into  your  faces  I  am  sure  the  interests  of  the  Savings 
Banks  Association  of  New  York  are  weU  guarded. 

"the  aristocracy  of  the  dollar" 

Colonel  Thomas  Wentworth  Higginson,  of  Boston,  ad- 
dressed the  Convention,  in  part,  as  follows:  Mr.  Presi- 
dent and  Gentlemen  of  the  Association:  The  subject  on 
which  I  am  to  speak  is  the  "Aristocracy  of  the  Dollar." 
Up  to  this  time  the  aristocracy  of  birth  and  the  aris- 


200  HISTORY  OF  THE  SAVINGS  BANKS 

tocracy  of  money  have  divided  the  world  between  them. 
In  the  early  days,  when  hereditary  aristocracy  was  well 
recognized  in  America,  it  was  customary  in  the  older  col- 
leges, such  as  Yale  and  Harvard,  as  soon  as  a  new  class 
arrived,  to  send  around  to  the  villages  from  whence  they 
came  and  get  their  comparative  social  positions,  and  then, 
as  you  will  see  in  the  older  catalogues,  they  were  arranged 
according  to  that  social  position  of  their  families  at  home 
and  not  alphabetically,  as  is  the  case  now.  I  have  often 
wished  that  I  could  see  in  the  aristocracy  of  the  dollar  in 
America  that  absolutely  simple  self-respect  which  you 
notice  in  the  men  in  England  who  know  they  are  born 
to  a  big  position  and  do  not  need  to  assert  it.  Take,  for 
instance,  the  question  of  coats  of  arms.  I  lived  in  New- 
port twelve  years,  and  in  watching  the  parade  of  the  car- 
riages up  and  down  the  avenue,  many  of  them  with  coats 
of  arms,  how  often  have  I  wished  that  those  living  in 
Newport,  driving  around  in  their  carriages,  would  show 
their  pride  in  the  one  thing  that  was  creditable  to  them, 
namely,  that  they  had  laid  the  foundation  of  their  own 
fortunes  and  were  willing  to  show  it  before  the  world. 

I  can  remember  when  there  was  but  one  man  in  the 
neighborhood  of  Boston,  Mr.  Gushing,  of  Watertown,  who 
was  even  suspected  of  being  a  millionaire.  I  used  to  hear 
it  discussed  in  my  boyhood:  "Do  you  suppose,  now,  that 
Gushing  has  really  got  a  million  dollars?  I  tell  you  a 
million  dollars  is  a  great  deal  of  money.  One  could  not 
have  as  much  as  a  million  dollars."  What  is  a  million 
dollars  now  in  these  regions  of  the  Ghamber  of  Gommerce? 
Respectable  poverty. 

There  was  an  instance  not  many  years  ago  where  a 
gentleman  of  great  wealth  felt  that  he  was  overtaxed  in 
Boston.  He  went  back  to  the  country  town  where  he  had 
lived,  where  his  father  was  a  quiet  country  clergyman,  who 
paid  a  tax  perhaps  of  $15  or  $20  a  year.  When  he  got 
back  there  the  selectmen  and  assessors  of  the  town  natu- 
rally were  somewhat  startled  at  the  sudden  splashing  down 
into  that  quiet  little  rural  lake  of  this  gorgeous  gold  and 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    201 

silver  fish,  and  they,  at  his  suggestion,  had  a  conference 
with  him  as  to  how  much  he  would  like  to  pay  taxes  on. 
He  came  at  it  from  the  other  point  of  view.  He  said: 
"What  does  it  cost  to  run  this  town  a  year,  anyhow?" 
And  they  said:  "About  so  much."  And  he  said:  "We 
wiU  try  it  in  this  way:  From  this  time  on,  as  bills  against 
the  town  come  in,  you  send  them  to  me.  I  will  settle 
them  for  a  year  and  we  will  see  how  it  works."  He  paid 
every  bill  against  the  town  that  year  out  of  his  income  and 
saved  $20,000  by  the  operation.  The  selectmen  of  that 
town  were  sensible  men.  They  did  not  let  up  a  bit  on  their 
taxation.  They  put  all  they  got  from  him  into  permanent 
improvements  and  the  consequence  is  that  it  is  the  best 
roaded,  the  best  sign-boarded,  and  the  best-managed  town 
in  the  heart  of  Massachusetts.     .     .     . 

On  the  other  hand,  when  we  look  at  the  aristocracy  of 
the  dollar,  we  find  strong  points  looming  up  in  its  favor. 

In  the  first  place,  there  is  the  obvious  fact  that  it  repre- 
sents to-day  and  not  yesterday  or,  at  the  most,  last  year 
and  not  the  last  century. 

Then,  again,  there  is  this  advantage  about  the  aristoc- 
racy of  the  dollar  that  it  brings  men  together.  The  aris- 
tocracy of  the  dollar  is  not  represented  by  castles,  by  walls, 
by  drawbridges;  it  is  represented  by  the  things  that  bring 
people  together,  by  the  railroads,  the  steamboat,  the  ex- 
press company,  the  telegraph,  the  telephone.  Everything 
that  now  stands  for  the  results  of  wealth  stands  for  things 
that  bring  people  together.  It  is  modern.  It  belongs  to 
peaceful,  organized  life.  Whatever  exceptions  there  may 
be  you  have  to  go  outside  of  your  own  country  to  find  them. 
If  you  once  go  into  the  imperial  business  I  will  not  predict 
what  you  will  find,  but  in  the  workings  of  the  aristocracy 
of  wealth  in  its  own  country  you  will  find  it  based  mainly 
on  the  works  of  peace. 

You  will  find  that  the  aristocracy  of  the  dollar,  having 
begun  in  the  people,  cannot  easily  detach  itself  from  the 
people. 

Then,  again,  there  is  this  further  advantage  to  the  aris- 


202  HISTORY  OF  THE  SAVINGS  BANKS 

tocracy  of  the  dollar,  that  it  belongs  in  a  manner  to  the 
future.  Representing  the  present,  it  represents  the  future 
also.  You  have  got  to  recognize  it.  You  have  got  to 
make  your  plans  for  it.  You  have  got  to  accustom  yourself 
to  it.  It  speaks  for  the  future.  This,  be  it  for  good  or 
evil,  is  the  organization  that  we  are  to  have.  What  may 
follow  it,  what  may  be  the  next  step,  we  do  not  know. 
What  combination  of  mutual  cooperation  or  support,  we 
cannot  teU.  There  are  opportunities  for  speculation  on 
that  subject.  But  we  are  in  the  current  of  opinions  that 
are  ruling  all  countries.  America  itself  is  stretching  out 
its  help  to  all  countries  into  this  same  plane  of  effort  to 
know  how  to  handle  the  wealth  of  the  future,  how  to  deal 
with  this  aristocracy  of  the  dollar  which  we  have  got  to 
deal  with  and  cannot  destroy.     .     .     . 

A  friend  of  mine  once  seeing  a  little  boy  at  the  theatre 
who  came  there  night  after  night  and  who  always  went 
sound  asleep,  after  the  curtain  fell — when  some  good  man 
who  had  wakened  him  up  and  put  his  hat  on  his  head  and 
started  him  home — said  to  him:  "Why  do  you  always 
come  here,  my  little  boy?  You  don't  seem  to  enjoy  it 
very  much.  You  always  go  to  sleep."  "Oh,"  said  the 
little  boy,  as  he  rubbed  his  eyes,  "you  don't  know  how  it 
is.  I  have  to  come.  I've  got  a  season  ticket."  Alas,  for 
wealth!  I  sometimes  think,  which  has  a  season  ticket  for 
everything  and  does  not  get  quite  the  full  enjoyment  out  of 
anything. 

ADDRESS   OF  HONORABLE   WHEELER  H.   PECKHAM 

Hon.  Wheeler  H.  Peckham  addressed  the  Convention 
as  follows : 

Mr.  President  and  Gentlemen:  After  listening  to  the 
very  charming  discussion  which  we  have  heard  from  the 
most  prominent  literary  man  of  Boston,  it  seems  a  little 
hard  to  turn  to  the  dry  subject  which  has  been  assigned 
to  me  to  speak  upon  this  afternoon. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    203 

The  aristocracy  of  the  dollar  is  shown  in  the  working- 
man  of  to-day,  whether  his  work  be  rewarded  by  smaller 
or  larger  consequences.  The  aristocracy  of  the  dollar,  I 
say,  is  shown  in  the  workingman  of  to-day  who  has  lifted 
himself  beyond  the  necessity  of  daily  toil  for  mere  exist- 
ence and  has  a  surplus.  And  the  moment  he  has  achieved 
that  surplus  something  else  can  be  done  by  that  man,  some 
further  step  can  be  taken  by  him  than  contenting  himself 
forever  with  the  drudgery  of  daily  toil. 

They  can  do  something,  they  do  do  something  to  add  to 
that  surplus,  to  the  means  of  existence  which  gives  them 
leisure  and  enables  every  man  of  them  to  do  something  for 
the  benefit  of  his  kind  as  well  as  for  himself.  And  yet  so 
recent  is  that  period  that  I  am  told  it  was  but  in  18 19  that 
the  first  Savings  Bank  was  organized  in  this  State;  and 
when  it  was  organized  the  man  who  deposited  his  savings 
there,  so  that  he  might  accumulate  something  for  himself, 
was  able  to  make  something  of  himself  more  than  the  mere 
drudge,  which,  prior  to  the  recent  economic  advance  of 
the  world — whatever  period  may  be  assigned  to  it — he  was 
unable  to  do. 

The  theme  assigned  to  me  this  afternoon  is  as  to  the  wel- 
fare of  these  depositors  in  the  Savings  Banks,  as  to  the 
right  or  power  of  the  Government,  after  having  for  years 
exempted  their  savings  from  taxation  now,  when  they  have 
amounted  to  millions  and  millions  of  dollars  based  upon 
the  faith  of  that  exemption,  to  say  whether  they  shaU  be 
taken  away  and  the  whole  or  a  large  part  of  the  income 
from  them  swept  into  the  cofi'ers  of  the  State  in  the  name 
of  taxation. 

During  this  past  year,  this  past  winter,  all  of  you  know 
there  was  introduced  into  the  Legislature — and  for  a  time 
it  seemed  as  if  it  might  pass  and  become  a  law — a  bill 
which  taxed  Savings  Banks,  substantially  the  same  as 
any  one  else  in  the  community,  upon  all  the  property  which 
was  in  their  possession.  It  aroused  your  antagonism 
naturally  enough.  You  all,  I  am  told,  opposed  it,  and  you 
with  others  opposed  it  successfully.     You  claimed  that 


204  HISTORY  OF  THE  SAVINGS  BANKS 

this  enormous  aggregation  of  capital  in  your  hands  be- 
longed to  poor  men,  and  that  it  was  not  a  right  or  fair 
thing  for  the  Government  to  tax  the  savings  of  its  poor 
citizens.  What  importance  or  how  much  weight  that 
argument  had  with  the  Legislature  when  they  determined 
to  refuse  to  pass  this  bill,  I  do  not  know.  I  am  not  pre- 
pared to  say  that  it  was  entitled  to  any.  I  cannot  see 
for  myself  why  the  savings  of  a  man  who  had  not  seen  fit 
to  put  them  into  a  Savings  Bank  should  be  taxed,  and  the 
savings  of  another  man,  who  had  seen  fit  to  put  them  in  a 
Savings  Bank,  should  not  be  taxed.  It  always  struck  me 
that  that  was  a  contention  difficult  to  the  last  degree  to 
maintain,  and  if  I  thought  that  the  claim  of  the  Savings 
Banks  that  their  assets  should  not  be  taxed  depended 
solely,  or  really  in  any  substantial  degree,  upon  that  con- 
tention I  should  not  have  the  confidence  in  it  which  I  now 
have.  I  think  that  there  is  another  and  a  vastly  better 
and  stronger  reason  for  it.  All  the  assets  of  Savings  Banks 
substantially  are  invested  in  what  are  known  as,  and  what 
we  call,  securities.  So  far  as  they  are  invested  in  real 
estate,  they  are  not  exempt  from  taxation,  but  so  far  as 
they  are  invested  in  securities  they  are  exempt  from  taxa- 
tion at  the  present  time.  The  bill  to  which  I  referred 
would  have  made  all  those  securities  subject  to  taxation. 

Now  it  seems  to  me  a  matter  of  demonstration  as  com- 
plete and  thorough  as  any  mathematical  demonstration 
can  be,  that  securities,  whether  held  by  Savings  Banks  or 
individuals,  should  not  and  cannot  be  taxed.  It  seems  to 
me  as  plain  as  it  possibly  can  be  that,  in  the  economic  sense 
of  the  word — mind  you,  gentlemen,  I  draw  a  distinction 
between  the  economic  sense  and  the  legal  sense — these 
securities  are  not  property.  They  are  not  capital.  They 
are  not  anything  that  has  ever  added  a  single  dollar  to  the 
wealth  of  the  world.  If  all  the  securities  in  the  world  were 
destroyed  the  world  would  be  in  no  sense  the  loser  other 
than  of  the  paper  upon  which  they  were  written  and  of  the 
work  in  printing  them. 

The  Legislature  of  the  State  and  the  taxing  ofiicers  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    205 

the  people,  and  the  authorities  who  have  had  to  do  with 
this  question  of  taxing  securities,  seem  to  have  been  un- 
able to  get  it  into  their  heads  that  securities  are  nothing 
but  a  means  for  the  distribution  of  wealth,  nothing  but 
the  distributors  of  capital  or  the  title  deeds  to  it. 

What  I  am  talking  about,  of  course,  is  something  with 
which  you  are  perfectly  familiar.  I  do  not  have  to  per- 
suade'^you  to  believe  it.  You  are  already  persuaded  now. 
I  merely  refer  to  it  as  a  thing  which  possibly  some  of 
you  may  not  have  noticed  before.  I  have.  I  have  been 
thirty  odd  years  talking  about  this  thing.  Not  as  an  ora- 
tor, not  as  a  declaimer.  I  have  been  paid  hard  cash  itself 
for  the  talking  that  I  have  done  about  this  matter  for 
the  last  thirty  years  by  the  men  who  employed  me  to  rep- 
resent them  before  legislative  committees.  And  who  do 
you  suppose  they  were?  Not  the  lenders,  not  men  who 
had  money  or  capital  to  lend,  but  the  men  who  wanted  to 
borrow  and  who  could  not  borrow  because  of  the  tax  laws 
of  the  State  of  New  York  taxing  the  mortgages  which 
might  be  made  by  them  when  they  borrowed,  and  because 
the  lenders  would  not  lend  upon  such  mortgages. 

In  the  early  days,  when  the  two  things  were  brought 
close  together,  there  was  a  usury  law  on  the  one  side  and  a 
law  regulating  the  rate  of  interest  on  the  other.  These 
came  together.  Lenders  were  apprehensive  that  it  might 
be  claimed  that  the  payment  of  the  tax  by  the  borrower 
would  be  a  payment  of  more  than  the  six  or  seven  per  cent., 
limited  by  the  law,  and  so  taint  with  usury  and  make  the 
transaction  doubly  dangerous,  and  the  aim  of  the  men  who 
were  suffering  because  they  could  not  borrow  this  money 
was  to  remove  the  usury  law,  or  the  tax  on  mortgages,  so 
that  they  could  go  into  the  money  market  and  borrow  on 
their  own  credit.  There  is  where  the  shoe  pinched.  That 
is  where  last  winter,  when  the  bill  was  attempted  to  be 
passed,  it  was  shown  to  pinch.  All  agreed  that  although 
by  that  bill  the  burden  was  put  directly  upon  the  mort- 
gagee, and  he  had  to  pay  it  in  the  first  place,  yet  in  the  end, 
owing  to  the  discrepancy  between  the  market  rate  of  in- 


2o6  HISTORY  OF  THE  SAVINGS  BANKS 

terest  and  the  legal  rate  of  interest,  there  was  no  difficulty 
v/hatever  in  the  lender  passing  the  burden  over  from  him- 
self to  the  borrower,  and  the  borrower  would  have  to  pay 
the  tax. 

No  doubt  has  ever  existed  anywhere  in  the  mind  of  any- 
body that  such  would  be  the  result  in  the  case  of  mort- 
gages. In  the  case  where  real  estate  is  the  subject-matter 
of  the  transaction,  and  in  this  State  with  respect  to  per- 
sonal property,  the  question  is  a  little  more  complex,  and 
for  this  reason:  In  the  early  days  of  the  occupation  of 
this  country  there  was  very  little  personal  property  and  the 
taxes  were  paid  mostly  by  those  who  held  the  land.  But 
they  did  in  early  days  provide  for  the  taxation  of  personal 
property,  and  not  only  that  but  they  inserted  in  the  law 
a  definition  of  what  was  personal  property.  They  said 
that  it  included  bonds,mortgages,choses  in  action,  prom- 
ises to  pay,  book  accounts,  and  things  of  that  character. 
On  the  other  hand,  while  a  man  was  taxed  for  all  those 
things  which  he  had,  and  for  any  other  personal  property 
which  he  had,  they  put  upon  the  statute  book  a  relieving 
clause,  as  it  might  be  called,  saying  that  there  should  be 
deducted  from  the  sum  total  of  his  personal  property  the 
debts  that  he  owed.  Now,  you  see  the  result.  If  the 
man  who  holds  the  bonds,  the  creditor,  the  security 
holder,  really  can  be  taxed,  if  he  can  be  made  to  pay  the 
taxes,  there  would  be  some  sort  of  reason  for  crediting 
the  amount  of  tax  that  he  paid,  or  the  value  of  the  prop- 
erty upon  which  he  paid,  to  the  owner  of  the  personal 
property  which  was  possessed  by  the  obliger.  Take  as  an 
illustration  a  railroad  company  for  a  more  ready  under- 
standing of  it.  It  has  a  large  amount  of  personal  property : 
cars,  locomotives,  engines,  machines,  and  all  sorts  of  things. 
All  its  rolling  stock  is  personal  property.  It  would  pay  a 
tax  on  that,  we  will  say,  to  an  amount  of  $50,000,  more 
or  less.  But  it  has  issued  a  lot  of  bonds,  three  and  one 
half  per  cent,  bonds,  selling  in  the  market  at  in.  The 
theory  of  the  law  is  that  for  just  that  amount  of  the 
personal  property  of  the  New  York  Central  Railroad 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    207 

Company  which  is  offset  by  bonds  issued,  the  rail- 
road shall  not  pay  the  tax,  but  the  bondholders  shall. 
We  will  say  the  tax  is  two  and  one  half  per  cent,  and  the 
bonds  are  three  and  one  half  per  cent.  Now  not  only 
are  the  bonds  three  and  one  half  per  cent.,  but  they  sell 
in  the  open  market  at  in,  or  112,  or  113,  as  the  case  may 
be.  We  all  know  that  those  bonds  do  not  in  fact  pay  any 
tax.  The  railroad  escapes  taxation  on  just  that  propor- 
tion of  its  actual,  visible,  tangible  working  capital  that  is 
equal  in  amount  to  the  amount  of  bonds  issued.  The 
bonds  are  subject  to  taxation,  and  according  to  the  law 
they  ought  to  be  taxed.  We  know,  as  a  matter  of  fact, 
that  no  man  who  owns  them  is  taxed  one  cent.  That  is 
the  working  of  the  law.  We  know  it  by  the  reports  of 
men  who  for  thirty  years  have  been  engaged,  to  the  utmost 
effort  of  their  lives,  in  attempting  to  actually  tax  secur- 
ities, and  we  know  it  from  the  Comptroller's  reports. 

The  State  Comptroller,  in  his  last  report,  stated  that,  of 
all  the  personal  property  in  this  State,  amounting  to  some 
eighteen  thousand  million  dollars,  and  including  in  that 
amount  not  only  securities  but  actual  personal  property, 
only  three  per  cent,  of  it  paid  a  tax. 

These  securities  cannot  pay  any  tax,  for  this  reason. 
A  man  invests  in  these  securities  in  competition  with  all 
other  opportunities  for  investment  afforded  not  only  here 
in  our  country,  but,  you  may  say,  in  the  whole  world. 
The  economic  law  is  based  on  various  facts,  among  them 
the  fact  that  the  property  is  so  easily  and  readily  hid  that 
it  cannot  be  found;  the  fact  that  in  no  other  country  in 
the  world  is  such  a  thing  known  as  taxation  of  personal 
property  in  that  way,  and  for  an  infinite  variety  of  rea- 
sons, which  I  cannot  state  now  in  detail,  these  capitalists 
who  have  this  money  to  lend  have  the  markets  of  the 
world  open  before  them.  The  rate  of  interest  is  deter- 
mined, and  actually  exists,  upon  what  is  called  the  net 
rate  to  them,  free  from  any  tax.  That  is  the  world's 
market.  That  is  the  world's  custom.  That  is  the  actual 
fact  as  it  exists,  that  the  man  who  lends  money  gets  for 


2o8  HISTORY  OF  THE  SAVINGS  BANKS 

it  not  an  amount  of  interest  out  of  which  he  shall  pay  the 
tax,  but  he  gets  an  amount  of  interest  based  upon  the 
idea  that  he  shall  not  pay  any  tax,  but  that  the  man  who 
has  borrowed  the  money  will  pay  all  the  taxes  which  are  to 
be  paid  out  of  the  earnings  of  the  particular  enterprise  which 
is  the  basis  of  the  pledge  for  the  security.  As  a  matter 
of  fact,  we  here  know  that  and  recognize  it  every  day. 
The  railroad  companies  recognize  it  to  the  extreme  when 
they  invariably  put  into  their  large  mortgages  which  have 
been  made  in  the  past  .five  or  ten  years  a  clause  to  the 
effect  that  in  case  a  tax  is  levied  upon  that  bond  by  the 
State  or  Federal  Government  that,  notwithstanding  the 
provision  of  law  that  the  railroad  company  shall  pay  the 
tax  and  charge  it  against  the  interest,  the  railroad  com- 
pany will  pay  the  tax  and  will  not  charge  it  against  the 
interest,  but  will  pay  the  interest  just  the  same  as  if  the 
tax  had  not  been  levied.  You  all  know  perfectly  well 
that  in  the  securities  you  have  in  your  banks,  the  modem 
mortgages,  every  one  of  them  contains  that  provision, 
and  it  is  right  and  fair  that  they  should,  because  out  of  the 
income  that  has  been  made,  or  that  shall  be  made,  by 
any  enterprise,  railroads,  bank,  manufactory,  or  anything 
else — out  of  the  money  that  is  made  by  that  enterprise 
every  single  dollar  of  tax,  interest,  income,  and  profits 
must  be  paid.  You  all  know  that  after  the  taxes  have 
been  paid — all  the  tax  which  that  income  will  stand — the 
rest  must  be  divided  between  the  lender — call  him  pro- 
motor  or  capitalist,  or  what  you  will — must  be  divided 
between  the  man  who  runs  the  enterprise  and  the  man 
who  has  loaned  the  capital,  for  the  use  of  that  capital  in 
that  enterprise,  as  they  agree.  Their  intention,  their 
agreement,  is  the  absolute  and  final  arbiter  of  the  pro- 
portion in  which  the  profits  of  the  enterprise  shall  be 
divided  between  them.  How,  then,  can  you  tax  it?  If 
you  tax  the  securities  immediately  after  the  security  there- 
by is  reduced  in  its  rate  of  interest  so  that  the  ordi- 
nary, fair,  average  rate  cannot  be  secured  to  it,  it  is  turned 
over  upon  the  borrower  who  has  to  pay  it.     It  is  impossi- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    209 

ble  that  it  should  be  otherwise.  If  you  take  from  that 
fund  directly  in  the  hands  of  the  man  who  is  managing 
it  all  that  can  be  taken  from  it  without  stirring  up  the 
disposition  of  the  community  to  such  an  extent  as  to  ac- 
complish a  revolution  or  a  reorganization  of  the  method 
of  managing  it,  you  cannot  touch  another  dollar  of  it 
by  calling  it  a  tax  upon  the  holder  of  the  securities,  which 
represents  a  tax  upon  the  same  fund  and  must  be  paid 
from  the  same  money.  They  do  not  seem  to  realize 
that  this  fund  for  the  payment  of  all  things  is  precisely 
like  the  water  in  a  well.  You  may  dig  a  wellhole  and 
take  all  the  water  from  it,  or  you  may  run  a  thousand 
pipes  of  small  diameter  from  that  well,  but  you  cannot  get 
any  more  water  from  the  pipes  than  you  can  get  from 
the  wellhole.  So  all  that  can  be  taken  by  the  State  for 
a  tax  upon  securities,  and  upon  the  property,  and  upon 
everything  connected  with  the  enterprise  is  limited  simply 
to  the  amount  of  the  income  of  that  enterprise.  You 
must  not  tax  any  income  to  an  extent  that  will  deprive  the 
persons  who  are  carrying  on  an  enterprise  of  a  large  share 
of  their  income.  Should  such  a  law  as  stands  on  our 
statute  books  be  really  enforced,  no  law  for  the  collection 
of  taxes  upon  these  securities  would  be  necessary. 

With  respect  to  the  railroad  corporation  where  the 
bonds  ran  for  two  hundred  years,  we  have  bought  those 
securities  at  the  low  rate  of  interest  provided  by  the  terms 
of  the  bond  based  upon  the  idea  that  those  securities  were 
exempt  from  taxation.  If  they  were  short-term  securities, 
the  injustice  of  taxing  them  would  not  be  so  great,  because 
at  the  end  of  the  year  the  lender  would  demand  a  different 
rate  of  interest,  and  that  it  should  be  enough  to  pay  the 
tax  and  leave  to  him  the  usual  interest  upon  the  money 
he  loaned.  But  where  the  bond  runs  for  a  hundred  years 
or  more  and  has  been  bought  upon  the  basis  that  it  should 
not  be  taxed,  and  if  the  State  then  turns  around  and  taxes 
it,  that  is  confiscation  to  the  extent  of  the  difference  be- 
tween the  value  of  the  boud  before  and  after  such  a  tax 
is  levied. 


2IO  HISTORY  OF  THE  SAVINGS  BANKS 

Gentlemen,  you  have  got  to  meet  this  fact  which  was 
brought  out  during  the  last  legislative  session.  You 
cannot  interest  the  politician,  the  average  politician,  in 
what  is  fair  or  right.  You  cannot  interest  him  in  eco- 
nomic truths  or  economic  science.  In  order  to  interest 
him  you  must  show  him  something  that  is  going  to  give 
him  votes  at  the  next  election.  In  order  to  change  this 
statute,  which  has  stood  upon  our  statute  books  for  so 
long,  appeal  to  politicians  is  in  vain  unless  you  show  them 
that  the  men  of  the  country,  as  a  whole,  are  one  on  this 
subject.  Unless  you  can  show  him  that  you  are  in  earnest 
yourself,  unless  you  can  show  him  that  the  vast  constit- 
uency you  represent  is  awake  to  the  fact  that  he  is  not 
doing  what  he  ought  to  do,  and  that  the  law  is  doing  an 
injustice  to  them,  you  cannot  interest  him. 

The  remedy  is  entirely  with  you.  It  is  for  you  to  let 
the  pohticians,  the  members  of  the  House  and  of  the 
Senate,  know  that  you  understand  this  thing,  that  you 
are  ready  and  determined  to  let  all  the  people  who  have 
votes  in  your  districts  understand  this  thing,  and  that 
you  are  determined  that  the  rights  of  the  people  who  work, 
who  are  devoted  to  their  work  alone,  who  are  occupied 
with  other  things  and  not  with  politics,  and  who  have 
put  their  savings-  in  the  shape  of  actual  capital  in  your 
banks,  shall  be  protected. 


CHAPTER  VIII 

Eighth  Annual  Convention — President  Andrew  D.  Mills  in  the 
Chair — Brief  Review  of  the  Past  Year's  Progress — Announce- 
ment of  the  Death  of  J.  Howard  King,  President  of  the  Albany 
Savings  Bank — The  Surplus  or  Guarantee  Fund  of  Savings 
Banks  and  Its  Proper  Legal  Uses  Elucidated  by  Mr.  Hicks, 
of  the  Bowery  Savings  Bank — Restriction  of  Deposits  Dis- 
cussed by  Mr.  Charles  A.  Miller,  of  Utica — Dormant 
Accounts. 

THE  newly  elected  President,  Mr.  Andrew  D.  Mills, 
was  in  the  chair  at  the  opening  of  the  Eighth 
Annual  Convention,  held  in  the  City  of  New  York, 
on  Wednesday,  May  8,  1901.  As  on  many  previous  oc- 
casions. Superintendent  Frederick  D.  Ealburn,  of  the  New 
York  Banking  Department,  was  an  honored  guest  of  the 
Convention. 

THE  president's  ADDRESS 

President  Mills  delivered  the  opening  address,  in  the 
course  of  which  he  said : 

The  year  that  has  passed  since  we  last  met  here  has 
been  one  of  great  national  prosperity,  one  of  the  evidences 
of  which  is  the  large  increase  in  deposits  in  the  Savings 
Banks  of  the  State  which  on  January  i,  1901,  aggregated 
the  enormous  sum  or  total  of  $947,000,000,  representing 
the  savings  of  over  2,000,000  depositors.  This  shows 
an  increase  for  the  year  including  interest  credited  of 
over  $59,000,000. 

The  banks  hold  in  addition  to  this  sum  a  so-called  sur- 
plus of  $118,000,000,  which  makes  a  total  of  resources 
of  $1,066,000,000. 


212  HISTORY  OF  THE  SAVINGS  BANKS 

It  must  not  be  forgotten,  however,  that  in  computing 
the  surplus  the  securities  have  been  taken  at  their  market 
value  which  exceeds  their  par  value  over  $48,000,000. 
This  latter  amount  represents  the  difference  between  the 
rate  of  interest  the  securities  bear  on  their  face  and  the 
current  rate  prevailing  at  the  time  the  reports  are  made, 
and  will  gradually  disappear  as  the  bonds  mature.  All 
securities  have  enhanced  in  value  during  the  last  five 
years,  and  a  considerable  portion  of  the  increase  of  this 
fund  is  due  to  that  fact. 

But  in  spite  of  this  increase  the  percentage  of  surplus  to 
liabilities  has  not  held  its  own,  but  according  to  the  figures 
of  the  Bank  Department,  as  reported  by  Superintendent 
Kilburn,  shows  a  decrease  of  three  quarters  of  one  per 
cent,  since  1895,  and  if  the  deposits  continue  to  increase 
and  the  earning  power  of  our  investments  continues  to 
decrease,  this  lessening  of  the  percentage  surplus  will  be 
more  marked  in  the  future.  I  have  used  the  word  "sur- 
plus" in  referring  to  this  fund,  as  that  is  the  name  under 
which  it  has  always  been  known. 

I  consider  the  name  unfortunate,  as  it  does  not  con- 
vey to  the  mind  of  the  average  person  what  it  really 
is.  I  think  the  name  "guarantee  fund,"  which  is  used 
in  many  other  States,  much  more  appropriate.  As  we 
all  thoroughly  appreciate,  it  is  a  fund  held  for  the 
purpose  of  guaranteeing  the  depositor  against  any  pos- 
sible loss  which  may  arise  from  the  depreciation  in  the 
value  of  investments  or  any  other  cause,  while  the  income 
from  it  accrues  to  the  benefit  to  all.  Accepting  this  as 
the  proper  definition,  the  true  function  of  this  fund  can- 
not be  mistaken. 

For  the  first  time  in  the  history  of  Savings  Banks  of  this 
State  the  Legislature  has  deemed  it  wise  to  levy  a  tax  of 
one  per  cent,  per  annum  on  the  "guarantee  fund"  based 
on  the  par  value  of  securities.  This  will  take  from  the 
earnings  of  the  banks  about  $700,000  a  year.  I  sincerely 
hope  and  trust  that  future  legislatures  will  not  increase  the 
burden. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    213 


REPORT   OF   THE   EXECUTIVE   COMMITTEE 

The  Executive  Committee  report  was  read  by  Mr.  Mc- 
Mahon,  Chairman  pro  tern,  as  follows: 

Gentlemen:  The  Executive  Committee  is  again  called 
upon  to  preface  its  report  with  the  announcement  of  the 
death  of  one  of  its  members. 

Shortly  after  the  last  annual  meeting,  J.  Howard  King, 
President  of  the  Albany  Savings  Banks,  after  a  brief  ill- 
ness, died.  Mr.  King  was  a  member  of  the  Executive 
Committee  from  its  organization,  and  by  his  regular  at- 
tendance at  its  meetings  and  the  prominent  part  he  took 
in  its  deliberations  evidenced  his  great  interest  in  all  that 
concerned  the  Savings  Bank  depositor.  The  vacancy 
caused  by  the  death  of  Mr.  King  was  filled  by  electing  his 
successor  in  the  Presidency  of  the  Albany  Savings  Bank, 
William  Bayard  Van  Rensselaer. 

The  bill  to  permit  Savings  Banks  to  loan  their  available 
funds  on  all  bonds  which  they  may  now  purchase  was 
introduced  by  Senator  Humphrey,  Chairman  of  the  Com- 
mittee on  Banks,  at  the  request  of  your  Committee,  and 
has  become  a  law. 

In  his  inaugural  message.  Governor  Odell  recommended 
that  the  surplus  of  Savings  Banks  be  taxed,  and  a  bill  was 
introduced  by  Senator  Krum  in  the  Senate  levying  a  tax 
of  one  per  cent,  on  the  surplus  of  the  banks,  all  securities 
to  be  taken  at  their  market  value. 

A  large  delegation  of  members  of  the  Association  ap- 
peared before  the  Joint  Committee  on  Taxation  and  Re- 
trenchment in  opposition  to  the  bill;  the  bill  was  passed 
after  an  amendment  had  been  added  that  the  taxation 
should  be  on  the  par  value  instead  of  the  market  value. 

THE  SURPLUS,  OR  GUARANTEE,  FUND  OF  SAVINGS  BANKS 

Mr.  Hicks,  of  the  Bowery  Savings  Bank,  New  York, 
addressed  the  Convention  in  part,  as  follows : 


214  HISTORY  OF  THE  SAVINGS  BANKS 

I  hardly  expected  to  be  called  upon  to  present  this  sub- 
ject to  you,  and  I  must  apologize  for  want  of  proper  prep- 
aration. I  will  state  briefly  the  facts  that  have  trans- 
pired recently.  The  question  in  regard  to  the  surplus  of 
Savings  Banks  has,  by  recent  events,  been  called  to  mind, 
and  various  considerations  have  been  given  to  it  probably 
by  you  all. 

In  looking  at  the  matter  it  seemed  that  the  word  "  sur- 
plus" was,  in  a  degree,  misleading  and  a  misnomer.  That 
is  the  word  used  in  the  annual  report.  As  I  understand  it, 
it  simply  means  the  balance  in  the  profit  and  loss  account. 
It  is  not  a  constant.  It  varies  from  year  to  year  and 
from  time  to  time.  Various  subtractions  are  made  from 
it  by  the  declaration  of  dividends.  Now  section  123  of 
the  laws,  I  find,  states  that  the  trustees  of  Savings  Banks 
shall  declare  such  a  dividend  as  is  practicable,  so  that  de- 
positors shall  receive,  as  nearly  as  may  be,  all  the  interest 
and  profits  of  the  institutions  that  have  been  earned.  That 
is  mandatory.  Then  a  saving  clause  says  that  they  may 
provide  a  reserve  to  meet  contingencies  and  other  items — - 
with  which  you  are  all  familiar — that  they  may  provide 
for  it.  As  to  that,  it  is  not  mandatory;  it  is  simply  per- 
missive for  them  to  do  so. 

I  have  given  attention  to  the  subject  and  wrote  to  our 
Bank  Superintendent,  asking  him  his  interpretation  of  it, 
and  asking  him  this  pertinent  question,  which  he  answered. 
I  have  his  letter  which  I  won't  take  time  to  read  now.  It 
briefly  states  that  the  subject  is  not  without  its  difficulties. 
He  reasons  partly  from  a  decision  given  by  the  Attorney- 
General  in  1898,  I  think,  that  only  the  interest  accruing 
for  the  last  period,  the  six  months,  can  be  applied  to  a 
dividend;  that  the  surplus — and  to  use  his  own  words — the 
established  surplus  shall  remain  intact  and  we  shall  not 
detract  from  it  at  any  time.  He  says  if  we  can  do  so  we 
can  detract  from  it  one  half  or  the  whole,  if  desired.  We 
have  no  right,  as  he  claims,  to  distribute  any  more  than 
the  current  six  months'  interest  earned.  I  then  put  this 
very  pertinent  question.     I  said:  "Our  own  bank  has  in 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    215 

hand  money  derived  from  the  sale  of  Government  bonds 
or  the  exchange  of  bonds.  We  have  received  a  large 
amount  in  anticipated  interest."  That  is  the  substance  of 
it,  although  it  is  not  stated  so  in  the  program  or  the  cir- 
cular issued  by  the  Secretary  of  the  Treasury.  It  is  in 
substance  the  anticipated  interest  of  seven  years.  I 
asked  him  the  question,  shall  that  seven  years'  interest  be 
distributed  in  the  last  six  months  or  shall  it  be  applied  to 
the  next  current  year  in  the  discretion  of  the  trustees? 
That  has  remained  unanswered. 

Now  my  contention  is  that  the  interpretation  that  has 
been  made  by  the  Bank  Superintendent  is  erroneous  inlaw, 
and  not  on  good  business  principles.  The  law  is  manda- 
tory only  to  one  extent ;  permissive  as  regards  the  amount 
that  we  can  retain.  I  have  introduced  this  subject  as 
being  one  occurring  within  my  own  experience.  I  have 
his  letter  and  opinion  of  counsel. 

Mr.  McMahon:  The  question  is,  as  I  understand  it,  is 
it  legal  for  a  Savings  Bank  to  take  from  its  surplus  in  order 
to  make  up  for  any  deficiency  in  the  earnings  that  may  be 
required  to  pay  the  usual — or  any  given — rate  of  interest? 

In  answering  this  question  in  the  negative,  I  will  first 
quote  the  law  on  the  subject. 

Chapter  689  of  the  Laws  of  1892.  Article  3,  section  1 23 
(this  section  has  never  been  amended),  says:  ^ 

'^  Rate  of  interest;  extra  dividends:  The  trustees  of 
every  such  corporation  shall  regulate  the  rate  of  in- 
terest or  dividends  not  to  exceed  five  per  cent,  per 
annum  upon  the  deposits  therewith,  in  such  manner 
that  depositors  shall  receive,  as  nearly  as  may  be,  all 
the  profits  of  such  corporation,  after  deducting  neces- 
sary expenses  and  reserving  such  amounts  as  the 
trustees  may  deem  expedient  as  a  surplus  fund  for  the 
security  of  the  depositors,  which  to  the  amount  of 
fifteen  per  centum  of  its  deposits  the  trustees  of  any 


'  Since  amended  by  the  Banking  Law  of  the  State  of  New  York,  chap.  2 
of  the  Consol.  Laws,  as  amended  by  chap.  369  of  the  Laws  of  1914,  article  6, 
sec.  254-256. 


2i6  HISTORY  OF  THE  SAVINGS  BANKS 

such  corporation  may  gradually  accumulate  and  hold, 
to  meet  any  contingency  or  loss  in  its  business  from 
the  depreciation  of  its  securities  or  otherwise.  No 
dividends  or  interest  shall  be  declared  credited  or 
paid,  except  by  the  authority  of  a  vote  of  the  Board 
of  Trustees  duly  entered  upon  their  minutes,  whereon 
shall  be  recorded  the  ayes  and  nays  upon  each  vote; 
but  accounts  closed  between  dividend  periods  may 
be  credited  with  interest  at  the  rate  of  the  last  divi- 
dend, computing  from  the  last  dividend  period  to  the 
date  when  closed,  if  the  by-laws  so  provide.  When- 
ever any  interest  or  dividend  shall  be  declared  and 
credited  in  excess  of  the  interest  or  profits  earned  and 
appearing  to  the  credit  of  the  corporation,  the  trustees 
voting  for  such  dividend  shall  be  jointly  and  severally 
liable  to  the  corporation  for  the  amount  of  such  excess 
so  declared  and  credited.  The  trustees  of  any  such 
corporation  whose  surplus  amounts  to  fifteen  per 
cent,  of  its  deposits,  at  least  once  in  three  years,  shall 
divide  equitably  the  accumulation  beyond  such  author- 
ized surplus  as  an  extra  dividend  to  depositors,  in 
excess  of  the  regular  dividends  authorized." 

This  language  is  apparently  clear;  we  are  told  that  at 
regular  quarterly  or  semi-annual  periods  the  depositors  shall 
receive  as  nearly  as  possible  all  the  profits  of  that  period, 
after  deducting  necessary  expenses  and  such  amount  as 
may  be  reserved  for  the  Surplus  Fund,  and  also  that 
this  Surplus  Fund,  limited  to  fifteen  per  cent,  of  the 
deposits,  is  to  be  held  to  meet  contingencies  or  losses  in  the 
business  from  depreciation  of  securities  or  otherwise.  It 
will  be  observed  that  it  does  not  say  that  this  fund  may 
be  used  to  pay  dividends,  except  that  when  amounting  to 
over  fifteen  per  cent,  the  accumulation  over  this  fifteen 
per  cent,  is  to  be  distributed  at  least  every  three  years  as  an 
extra  dividend. 

It  seems  evident  to  me  that  the  intent  of  the  law  is  that 
the  dividend  declared  must  be  earned,  or,  in  other  words, 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    217 

that  the  earnings  for  a  given  period  must  at  least  equal 
the  interest  paid  depositors;  I  do  not  think  that  the  law 
ever  contemplated  giving  power  to  Savings  Banks  to  so 
handle  their  business  that  dividends  might  be  paid  ir- 
respective of  earnings.  Whatever  sums  were  earned  in 
past  years  in  excess  of  necessary  expenses  and  dividends 
were  credited  to  a  Surplus  Fund,  to  be  used  as  directed 
by  law;  the  purposes  of  this  Surplus  Fund  are  clearly 
defined,  and  among  these  purposes  I  fail  to  find  one  author- 
izing its  use  for  the  payment  of  dividends  not  earned. 

We  have,  moreover,  an  opinion  of  the  Attorney-General, 
who,  in  1887,  in  reply  to  the  following  question  of  the  Super- 
intendent of  Banks:  "May  the  trustees  of  a  Savings  Bank 
use  the  surplus  for  the  purpose  of  paying  dividends  in  excess 
of  the  amount  actually  earned  during  the  period  for  which 
such  dividend  is  declared,  until  such  time  as  the  surplus 
equals  fifteen  per  cent,  of  its  deposits?"  replied  as  follows: 

"When  the  statute  .  .  .  speaks  of  declaring 
a  dividend,  it  means  a  dividend  earned  during  one  of 
the  interest  periods,  or  during  the  half  or  quarter 
year  for  which  it  is  declared.  The  officers  of  the 
banks  act  for  the  depositors,  who  are  entitled  to  all 
the  earnings  of  their  money  during  any  proper  inter- 
est period,  less  the  authorized  deductions  for  ex- 
penses and  the  surplus  provided  for  in  section  267 
(now  section  123).  I  find  nothing  in  the  statute  which 
would  authorize  the  trustees  of  a  Savings  Bank  to 
withhold  any  earnings  of  one  period,  in  order  to  add 
them  to  and  increase  the  dividends  of  a  subsequent 
period.  This  would  work  injustice  to  depositors,  and 
result  in  depriving  depositors  who  withdraw  their 
deposits  of  the  full  amount  of  interest  earned.  They 
can  only  be  withheld  for  the  purpose  of  accumulat- 
ing a  surplus  in  the  manner  indicated  in  section  267 
(now  123).  Nor  do  I  find  any  provision  authorizing 
the  use  of  the  established  surplus  for  the  payment  of 
dividends.     The  surplus,  to  the  amount  of  at  least 


2i8  HISTORY  OF  THE  SAVINGS  BANKS 

fifteen  per  cent,  of  the  deposits,  is  declared  to  be  for 
the  security  of  the  depositors,  and  the  statute  con- 
templates its  being  kept  intact  for  that  purpose. 
There  is  an  express  provision  for  the  disposition  of 
the  excess  of  the  surplus.  Such  excess  of  authorized 
surplus  must  be  divided  as  a  dividend,  once  in  three 
years.  I  am  of  the  opinion,  therefore,  that  it  is  the 
duty  of  the  trustees  of  a  Savings  Bank  to  declare  a 
dividend  for  each  interest  period,  equal  to  the  amount 
of  earnings  for  that  particular  period,  less  the  ex- 
penses and  the  amount  properly  appUcable  to  the 
accumulation  of  the  authorized  surplus,  as  aforesaid, 
and  that  they  should  not  retain  the  earnings  of  one 
period  for  the  mere  purpose  of  increasing  the  divi- 
dend of  a  subsequent  period,  nor  use  the  established 
surplus  for  the  purpose  of  increasing  the  dividend, 
except  when  such  surplus  exceeds  the  amount  author- 
ized by  the  statute,  and  in  that  case  such  excess  of  sur- 
plus should  only  be  converted  into  dividends  in  accord- 
ance with  the  provisions  of  the  statute  above  quoted." 

In  conclusion,  and  to  resume,  I  beg  to  say  that  to  the 
best  of  my  judgment  and  beHef ,  Savings  Banks  may  not 
use  their  surplus  fund  for  the  purpose  of  paying  dividends 
not  earned  during  the  interest  period.  They  may,  how- 
ever, declare  dividends  up  to  their  total  gross  earnings  for 
that  period,  if  they  have  a  surplus  fund  to  draw  upon, 
without  violating  the  law. 

General  Meserole,  President  Williamsburgh  Savings 
Bank,  of  Brooklyn:  I  did  not  suppose  there  was  any  ques- 
tion in  regard  to  what  you  could  do  with  the  surplus. 
I  did  not  suppose  there  was  any  difference  of  opinion.  I 
thought  it  was  perfectly  clear  that  you  could  not  touch 
the  surplus  with  which  to  pay  the  di^ddend,  but  that  you 
can  make  such  dividends  as  you  please  and  put  the  rest 
into  the  surplus.  I  did  not  suppose  there  was  any  ground 
for  argument  on  that  point. 

Mr.  Kilburn,  Superintendent  of  Banks:    This  is  not  a 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    219 

new  question  to  me.  I  have  had  it  before  me  two  or  three 
times  since  I  became  Superintendent.  I  think  my  uni- 
form opinion  has  been,  wherever  I  have  given  it,  that  a 
bank  had  no  right  to  use  part  of  its  accumulated  surplus 
for  the  payment  of  interest  to  its  depositors  until,  of 
course,  that  surplus  amounts  to  fifteen  per  centum  pro- 
vided for  in  the  statute,  when  it  is  obligatory  upon  the 
banks  to  divide  the  amount  over  the  fifteen  per  centum. 

I  had  a  communication  not  long  since  from  a  bank 
asking  me  this  question.  In  my  answer  to  that  communi- 
cation I  cited  a  case  which  has  been  decided  in  the  Court 
of  Appeals,  I  believe.  I  cannot  tell  you  now  what  the 
case  was,  or  where  it  is  reported,  but  I  had  the  case  before 
me  at  the  time.  As  I  remember  it,  that  case  decided 
specifically  that  if  dividends  were  declared  amounting  to 
more  than  the  earnings  for  the  interest  period,  in  the 
absence  of  proof  of  fraud  upon  the  part  of  the  directors, 
it  was  not  unlawful,  and  that  the  directors  were  not  liable 
for  having  declared  the  dividend. 

There  is  an  opinion  on  file  by  the  Attorney-General, 
given  to  my  predecessor,  upon  this  question.  I  think  that 
Mr.  McMahon  speaks  of  it  in  his  paper.  It  is  to  the  effect 
that  there  is  no  authority  in  the  law  giving  power  to 
trustees  to  declare  a  dividend  beyond  the  earnings  for 
the  interest  period.  Now  my  own  opinion  is  that  the 
law  is  settled  upon  that  point,  and  I  do  not  believe  that  a 
Savings  Bank  has  the  right  to  declare  a  dividend,  or  to 
pay  interest,  beyond  the  earnings  of  the  interest  period. 

If  you  can  declare  a  dividend  for  a  greater  amount  than 
the  earnings  for  the  interest  period,  you  can  go  to  the 
hmit  allowed  under  the  law  which  is,  I  believe,  five  per 
cent.,  and  you  may  continue  declaring  dividends  out  of 
your  surplus  until  your  surplus  is  wiped  out,  because 
there  is  nothing  in  the  law  whatever  obligatory  upon  the 
Savings  Banks  to  accumulate  a  surplus.  It  is  permissive. 
The  law  allows  you  to  accumulate  a  surplus  not  exceeding 
fifteen  per  centum  of  your  deposits  on  the  par  value. 
Now  I  know  of  no  law  which  will  prevent  you  from  divid- 


220  HISTORY  OF  THE  SAVINGS  BANKS 

ing  your  whole  surplus  among  your  depositors  if  you  have 
the  right  to  divide  any  of  it. 

Now  as  to  the  question  of  safety,  the  question  of  good 
management,  conservative  management.  It  seems  to  me 
that  it  is  a  proper  thing  to  accumulate  a  surplus.  It  is 
a  safety  fund.  That  is  what  the  l.aw  meant  it  should  be. 
It  is  for  the  purpose  of  protecting  your  depositors  against 
any  depreciation  in  the  securities,  or  losses  which  you 
may  make  through  loans.  Now  when  you  divide  that 
surplus,  or  when  the  law  gives  you  the  power  to  divide 
a  surplus  already  accumulated,  you  defeat  the  very  pur- 
pose of  the  surplus.  You  do  away  with  the  safety  fund 
which  the  law  says  you  may  accumulate  and,  it  seems  to 
me,  that  you  absolutely  defeat  the  purpose  which  the  law 
had  in  contemplation  when  it  said  you  might  accumulate 
this  surplus. 

The  theory  of  the  law,  as  I  understand  it,  is  that  you 
shall  divide  among  your  depositors  all  of  your  earnings 
aside  from  the  expenses  and  a  reasonable  amount  which 
you  may  carry  to  surplus.  Now  if  you  have  carried  an 
unreasonable  amount  to  surplus,  so  much  so  that  you  now 
feel  that  you  should  have  the  privilege  of  dividing  that 
surplus  or  part  qf  it,  then  you  carried  an  unreasonable 
amount  in  the  first  place  to  your  surplus  fund,  and  it 
opens  the  door  so  wide,  in  my  opinion,  if  you  admit  or 
claim  that  you  may  divide  your  surplus — I  say  that  opens 
the  door  so  wide,  brings  up  so  many  contingencies,  and 
gives  rise  to  so  many  diversified  opinions  in  management 
among  the  Savings  Banks  that,  in  my  opinion,  it  would 
become  a  dangerous  practice. 

I  do  not  know  but  what  I  say  may  tread  upon  the  corns 
of  somebody  who  desires  to  declare  a  larger  dividend  than 
their  current  earnings  will  permit.  That  may  be  so,  and 
if  you  had  but  one  case  to  deal  with,  and  that  was  the  end 
of  it,  there  might  not  be  any  great  injustice  done,  or  any- 
thing done  which  would  be  unwise,  but  this  is  a  question 
which  you  have  got  to  apply  universally.  It  is  a  general 
proposition,  and  if  one  has  a  right  to  do  it  another  has  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    221 

same  right.  If  you  establish  the  rule  that  a  Savings  Bank 
may  divide  its  surplus,  then  I  say  that  it  may  become  a 
dangerous  practice  and  endanger  the  safety  and  stability 
of  the  Savings  Banks  of  this  State. 

It  seems  to  me,  that,  as  a  general  proposition,  it  is 
dangerous  to  claim  or  to  admit  that  Savings  Banks  have 
the  right  to  divide  that  surplus  which  has  been  laid  aside 
as  a  reasonable  guarantee  or  safety  fund  against  losses 
occurring  through  loans  or  otherwise.  I  have  looked  up 
the  question  with  some  care  and  I  can  come  to  no  other 
conclusion  than  that  the  law  means  that  the  reasonable 
surplus  which  you  have  accumulated  for  the  purpose  of 
guaranteeing  your  depositors  against  losses  may  not  be 
divided  among  your  depositors  until  that  surplus  fund 
amounts  to  more  than  fifteen  per  centum.  Then  you 
must  divide  it,  and  the  law  seems  to  contemplate  that  the 
sum  is  sufficient,  that  fifteen  per  cent,  of  your  deposits  is 
sufficient  to  guarantee  their  safety. 

RESTRICTION  OF   SAVINGS   BANK  DEPOSITS 

A  valuable  paper  upon  the  subject  of  the  restriction  of 
Savings  Bank  deposits  was  read  by  Mr.  Charles  A. 
Miller,  Vice-President  of  the  Savings  Bank  of  Utica.  In 
the  course  of  his  address,  Mr.  Miller  said: 

The  preamble  to  the  charter  of  the  Bank  for  Savings, 
Chapter  62  of  the  Laws  of  1819,  begins: 

"Whereas  the  Society  for  Prevention  of  Pauperism  in 
the  City  of  New  York  have  petitioned  to  the  Legislature 
for  an  act  of  incorporation,  for  the  laudable  purpose  of 
encouraging  in  the  community  habits  of  industry  and 
economy,  by  receiving  and  vesting  in  Government  secur- 
ities or  in  stock  created  and  issued  under  and  by  virtue 
of  any  law  of  the  United  States,  or  of  this  State,  and  in  no 
other  way,  such  small  sums  of  money  as  may  be  saved 
from  the  earnings  of  tradesmen,  mechanics,  laborers, 
miners,  servants,  and  others." 


222  HISTORY  OF  THE  SAVINGS  BANKS 

When  considering  any  problem  in  Savings  Bank  man- 
agement, I  like  to  turn  to  these  words  of  the  founders  of 
the  Savings  Bank  system.  They  explain  why  Savings 
Banks  exist,  why  they  are  guided  by  unpaid  trustees,  why 
they  have  received  and  are  entitled  to  receive  favors  and 
exemptions  at  the  hands  of  the  Legislature.  And,  fur- 
ther, they  furnish  a  criterion  by  which  all  Savings  Bank 
policy  may  be  tried. 

They  prove  that  the  Savings  Bank  system  was  intro- 
duced, not  as  a  means  of  investment  for  the  rich,  not  even 
as  a  convenience  for  the  well-to-do,  but  for  the  "laudable 
purpose"  of  encouraging  the  poor  in  habits  of  industry 
and  thrift. 

How  needless  it  ought  to  be  to  restate  this  famihar 
fact.  Yet  it  cannot  be  insisted  on  too  strongly.  It  is 
not  understood  by  the  community  at  large,  with  the  result 
that  many  are  jealous  of  our  privileges  and  criticise  our 
management.  It  is  ignored  by  the  Legislature  and  we 
are  taxed.  When  it  shall  be  forgotten  by  Savings  Bank 
officials,  the  whole  system  will  be  imperilled. 

Let  us,  then,  remember  the  chief  object  of  our  existence 
and  bear  in  mind  that  any  policy  of  management  which  in 
any  way  hinders  us  in  fulfilling  it  is  essentially  bad. 

Now  it  cannot  be  disputed  that  many  banks  have 
sought  or  at  least  have  received  large  deposits  without  in- 
quiry as  to  whether  or  not  the  depositor  belonged  to  the 
class  which  needed  encouragement  in  "habits  of  industry 
and  economy."  This  is  not  surprising,  for  we  all  like  to 
feel  that  the  interests  committed  to  our  control  are  grow- 
ing more  important,  that  our  bank  is  outstripping  its 
neighbor.  Then,  too,  in  the  large  city  institutions  the 
enormous  number  of  transactions  makes  it  a  practical 
impossibility  to  institute  personal  inquiry  as  to  the  desir- 
ability of  each  deposit  which  is  offered.  Nevertheless, 
though  this  state  of  aftairs  may  be  natural,  it  has  still  been 
an  injury  to  the  Savings  Bank  system.  Superintendent 
Kilburn  in  his  report  of  1899  says: 

"Excessive  deposits  made  only  for  investment  by  men 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    223 

competent  to  care  for  their  own  interests  give  the  most 
reasonable  cause  for  criticism  of  the  Savings  Bank  system, 
affording  those  who  would  impose  unreasonable  exactions 
upon  banks  an  excuse  for  their  attitude." 

At  the  beginning  of  the  only  serious  run  in  our  history 
our  average  deposit  was  $346.  About  ten  days  later, 
when  the  run  was  over,  this  had  fallen  to  $301,  and  we 
found  that  the  average  size  of  the  accounts  closed  during 
this  period  was  $535. 

Mr.  McMahon:  I  only  want  to  refer  to  the  statement 
regarding  the  depositing  in  our  institutions  of  a  very  large 
amount  of  money  by  the  well-to-do  classes  as  being,  to  me, 
exaggeration.  I  may  be  wrong,  but  I  am  gauging  my 
judgment  of  this  matter  from  our  bank  which,  I  take  it,  is 
a  very  fair  criterion  of  the  banks  of  our  city.  I  can  say 
truthfully  that  in  our  bank,  and  I  have  watched  the  matter 
very  closely,  the  aggregate  of  such  accounts  is  a  mere 
bagatelle  when  compared  with  the  gross  amount  of  de- 
posits. I  have  noticed  in  the  last  year  or  two  that  we 
have  received  quite  a  good  deal  of  money  from  widows  and 
orphans,  money  that  comes  to  them  through  some  of  these 
benevolent  insurance  associations,  and  we  believe  that 
that  money  is  just  as  legitimate  Savings  Bank  money  as 
the  ten-dollar  deposit  of  a  servant  or  laborer. 

Mr.  David  Cromwell:  I  presume  every  Savings  Bank 
has  found  more  or  less  among  its  depositors  those  who  had 
no  right  to  be  there,  and  while  I  disagree  with  the  gentle- 
man entirely  in  his  proposed  legislation  because  I  think  the 
injury  would  be  greater  than  the  benefit,  still  it  seems  to 
me  that  this  Association  of  the  New  York  State  Savings 
Banks  should  put  itself  upon  record  in  regard  to  this  mat- 
ter of  large  deposits  by  persons  who  simply  use  the 
Savings  Banks  as  an  investment,  and  I  suggest  that  a  reso- 
lution, something  in  this  shape,  should  be  passed  by  this 
Association : 

Resolved,  That  it  is  the  sense  of  this  Association  of  the 
Savings  Banks  of  the  State  of  New  York  that  every  bank 
should  discourage  and  absolutely  refuse  all  deposits  where 


224  HISTORY  OF  THE  SAVINGS  BANKS 

they  are  satisfied  that  the  depositor  is  entirely  capable  of 
caring  for  his  investment  according  to  the  true  intent  of 
the  law. 

The  above  resolution  was  passed. 


DORMANT  ACCOUNTS 

Mr.  Hurlbut:  We  have  been  threshing  out  wheat;  I 
want  to  thresh  out  a  little  chaff.  Mr.  Miller  made  use  of 
the  expression,  "Unclaimed  deposits."  I  don't  think  he 
meant  that  exactly.  You  will  all  agree  with  me  that  there 
is  no  such  thing  as  an  unclaimed  deposit.  Any  deposit  is 
liable  to  be  claimed.  There  are  deposits  which  are  dor- 
mant and  they  give  us  a  great  deal  of  trouble.  I  think 
they  are  something  like  the  history  of  the  snakes  in  Ire- 
land. There  are  no  snakes  in  Ireland  and  there  should  be 
no  dormant  accounts.  I  have  assurance  enough  to  sug- 
gest a  little  advice  which  I  think  I  am  perfectly  competent 
to  offer  after  many  years'  experience  in  dealing  with  these 
accounts.  If  accounts  become  dormant,  or  have  not  been 
drawn  on  for  ten  years,  I  consider  it  absolutely  necessary 
that  the  Savings  Bank  officers  should  at  once  start  to  find 
that  depositor  and  make  the  account  no  longer  a  dormant 
account.  Do  this  before  it  becomes  dormant,  in  the  ten 
or  eleven  years.  If  you  cannot  get  him  in  these  ten  or 
eleven  years  he  is  pretty  hard  to  find.  Therefore  the  way 
to  have  no  dormant  accounts  is  to  begin  early.  Don't  let 
them  run  too  long. 

In  addition  to  that,  I  think  one  error  that  certain  of  our 
older  banks  have  made  is  that  they  do  not  take  a  sufficient 
identification  at  the  time  of  opening  the  account.  If  a 
man  comes  into  our  bank  and  makes  a  deposit,  he  is  very 
well  known  to  all  of  us.  We  take  his  pedigree  and  all  that, 
but  at  some  time  or  other  he  drops  out  of  sight  and  at  the 
end  of  twenty  years  the  account  becomes  dormant.  No- 
body remembers  him,  either.  If  we  begin  early  the  matter 
can  be  traced.  You  have  the  man's  birthplace,  the  names 
of  his  parents  but  don't  always  know  whether  they  are 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    225 

living  or  not.  After  a  long  search  we  discover  John 
Smith:  we  find  such  a  name  on  our  books.  I  think  we 
would  be  glad  to  give  that  information  to  any  bank  that 
wants  it,  and  how  much  better  it  would  be  for  us  if  all 
the  banks  endeavored  to  help  one  another  all  the  way 
through. 

In  this  connection  a  suggestion  has  occurred  to  my  mind. 
The  Bank  Department  at  Albany  has  a  list  of  all  un- 
claimed deposits.  I  spoke  to  the  Superintendent  about 
it  a  few  minutes  ago,  but  he  did  not  have  time  to  go  into 
it  fully.  That  department  having  a  list  of  these  so-called 
unclaimed  deposits  should  send  to  each  bank  this  list 
of  wanted  depositors.  Then,  speaking  for  myself,  I 
should  take  the  list  and  go  over  it  very  carefully,  and  if 
I  found  I  had  a  name  of  somebody  who  was  wanted  I 
would  look  at  my  book  and  see  when  I  last  had  a  trans- 
action with  him  and  I  would  communicate  with  the  bank 
wanting  him  and  put  them  on  the  trace  of  him.  That 
seems  to  me  to  be  a  very  reasonable  suggestion.  Take, 
for  instance,  a  bank  in  the  centre  of  the  State.  Your 
young  men  come  down  to  the  metropolis,  you  lose  track 
of  them,  perhaps  the  family  or  the  parent  stock  have  all 
died,  and  you  don't  know  what  has  become  of  the  boy 
except  that  he  came  down  to  New  York.  If  he  comes 
down  to  New  York  he  is  probably  a  clerk,  and,  in  that 
position,  he  probably  opened  a  Savings  Bank  account, 
and  we  may  know  him,  but  he  has  dropped  out  of  your 
sight  altogether.  New  York  is  a  big  place.  We  may  have 
him  on  our  books.  If  he  lives  in  a  boarding-house  his 
address  is  often  of  no  help  when  his  account  becomes  dor- 
mant. But  he  was  born  up  at  Rome  perhaps,  or  some- 
where in  that  neighborhood.  The  Savings  Bank  there 
knows  the  family  and  probably  the  oldest  inhabitant 
there  says:  "Why,  yes,  I  remember  that  man."  In  Syra- 
cuse, perhaps,  David  Harum  will  say  that  he  remembers 
that  man's  family,  and  I  think  it  would  be  of  mutual 
assistance  to  ourselves  if  some  such  action  as  that  was 
taken.     Mr.  Kilburn  said  he  thought  it  would  be  rather 


2  26  HISTORY  OF  THE  SAVINGS  BANKS 

objectionable  to  have  that  list  go  out,  because  it  would 
fall  into  the  hands  of  those  who  wanted  to  use  it  for  im- 
proper purposes,  but  it  seems  to  me  the  list  might  be 
prepared  and  each  name  prefaced  by  a  number,  and  if  we 
desired  information  respecting  any  one  we  would  write 
to  the  department  stating  the  number  which  prefaced 
the  name  and  the  department  would  give  us  the  name  of 
the  bank  in  which  the  deposit  was.  Something  of  that 
kind  will  help  us.  I  should  like  to  have  that  matter  left 
to  the  Executive  Committee  to  see  if  they  think  there  is 
anything  in  it.  The  older  banks  feel  very  keenly  the 
necessity  of  doing  something  of  this  sort.  We  ought  to 
have  no  jealousies  and  we  ought  to  be  willing  to  help  one 
another  all  we  can.    It  seems  to  me  here  is  one  way  to  do  it. 


CHAPTER  IX 

Ninth  Annual  Convention — Retirement  of  Andrew  D,  Mills  as 
President,  and  Election  of  Charles  A.  Schieren  in  His  Stead — 
Deposits  in  the  Savings  Banks  of  the  State  Reported  the  Larg- 
est in  Its  History — Adoption  of  a  Resolution  Looking  Toward 
Discouragement  of  Individual  Action — Paper  on  "Sound 
Money"  by  Hon.  E.  J.  Hill,  of  Connecticut. 

THE  meeting  of  the  Ninth  Annual  Convention,  held 
in  the  City  of  New  York  on  the  7th  of  May,  1902, 
marked  the  retirement  of  Mr.  Andrew  D.  Mills 
from  the  Presidency  of  the  Association  and  the  election 
of  Mr.  Charles  A.  Schieren  in  his  stead.  The  retiring 
President  was  given  a  hearty  vote  of  thanks  for  the 
efficient  manner  in  which  he  had  presided  over  the  delib- 
erations of  the  Conventions  for  the  past  two  years. 
In  his  opening  address,  Mr.  Mills  said : 

It  is  my  pleasure,  as  well  as  my  duty,  to  bid  you  wel- 
come to  the  Ninth  Annual  Convention  of  this  Associa- 
tion. Reaching  on  January  i,  1902,  the  enormous  total  of 
$1,014,000,000,  the  deposits  in  the  Savings  Banks  of  the 
State  are  the  largest  in  our  history.  This  is  an  increase 
for  the  year  of  over  $67,000,000;  total  amount,  including 
surplus,  $1,131,564,624. 

But  of  more  importance  even  than  this  increase  of 
money  saved  is  the  increase  in  the  number  of  individual 
depositors.  The  number  of  depositors  to-day  is  2,174,51 1, 
or  about  one  in  three-and-one-half  of  the  entire  popu- 
lation of  the  State.  As  the  vast  majority  of  these  are 
wage-earners,  the  increase  evidences  not  only  the  dis- 
position to  save  but  the  ability  to  do  so.     Every  en- 

227 


228  HISTORY  OF  THE  SAVINGS  BANKS 

couragement  should  be  held  out  to  the  working  classes 
to  lay  by  some  part  of  their  earnings,  and  thus  become 
personally  and  financially  interested  in  the  preservation 
of  law  and  order.  Nothing  goes  further  in  the  making  of 
a  good  law-abiding  citizen  than  the  possession  of  a  Savings 
Bank  book. 

It  is  interesting  to  note  that  to-day  the  depositors  of 
the  Savings  Banks  of  this  State  could  pay  the  entire 
national  debt  of  $931,000,000  and  still  have  $200,000,000 
remaining. 

As  the  deposits  continue  to  grow  and  the  number 
of  depositors  continues  to  increase,  the  importance  of 
the  trust  grows  in  even  greater  ratio.  As  in  the  past, 
conservatism  and  care  are  necessary  in  guarding  this 
immense  aggregation  of  widows'  mites  and  workingmen's 
savings. 

The  Association  sustained  a  great  loss  in  the  sudden 
death  of  Senator  L.  H.  Humphrey,  for  many  years  Chair- 
man of  the  Committee  on  Banks  of  the  Senate.  He 
had  through  his  long  service  become  thoroughly  familiar 
with  the  needs  of  the  Savings  Banks,  and  was  heartily 
in  accord  with  all  beneficial  legislation.  He  was  a  broad- 
minded  man,  honorable  and  straightforward,  quick  to 
recognize  the  right,  and  fearless  in  his  denunciation  of 
that  which  was  harmful.  I  had  grown  to  esteem  him 
highly  as  one  who  represented  the  best  in  the  political 
world  and  regard  his  death  as  a  personal  loss. 

Before  vacating  the  position  I  have  occupied  for  the  last 
two  years  I  wish  to  bring  to  your  attention  a  matter  which 
I  deem  of  the  utmost  importance  to  the  successful  con- 
tinuance of  this  Association. 

What  I  have  to  say  is  said  in  all  kindness,  and  I  trust 
it  will  be  received  in  the  same  spirit.  It  goes  without 
saying  that  the  strength  of  an  organization  depends  en- 
tirely upon  unity  of  action,  and  if  any  question  arises 
upon  which  there  is  a  difference  of  opinion  the  voice  of 
the  majority  should  prevail.  These  fundamental  truths 
apply  to  the  Savings  Banks  Association  as  well  as  to  any 


CHARLES  A.  SCHIEREN 


PRESIDENT,  1002-03 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    229 

other.  Nine  years  ago  this  Association  was  formed  for 
the  main  purpose  of  making  united  action  on  all  important 
questions  affecting  the  Savings  Bank  system  possible. 

From  the  first  it  was  a  great  success,  and  year  after 
year  it  grew  in  usefulness  and  strength  until  it  had  at- 
tained a  position  where  its  voice  was  listened  to  and  its 
recommendations  respectfully  considered  by  the  different 
branches  of  the  Legislature  and  the  Chief  Executive  of 
the  State.  The  strength  of  this  position  lay  in  the  fact 
that  when  your  executive  ofiicers  took  a  position  at  Al- 
bany before  the  Governor  or  any  of  the  Committees 
of  the  Legislature,  it  was  known  that  the  united  force 
of  all  Savings  Banks  of  the  State  was  behind  them. 
Destroy  this  unity  and  you  make  the  efforts  of  your 
officers  futile. 

I  trust  that  later  on  action  on  this  matter  will  take  defi- 
nite form,  and  the  question  be  settled  once  for  all. 

At  a  later  time  in  the  session,  the  matter  was  brought 
up  by  Mr.  Hanaman,  who  said: 

I  am  going  to  offer  a  resolution  which  you  can  discuss 
and  pass  if  you  like.  It  seems  to  me  that  the  Executive 
Committee  is  of  no  use,  and  practically  the  Savings  Banks 
Association  is  of  no  use,  to  the  Savings  Banks  of  the  State 
of  New  York  unless  the  Executive  Committee,  when  it 
speaks  to  the  Legislature  of  the  State  of  New  York,  repre- 
sents the  Association  and  not  its  individual  members. 

^^ Resolved,  That  the  prosperity,  influence,  and  strength 
of  the  Association  is  dependent  upon  the  harmonious  re- 
lation of  its  members;  and  it  is  the  sense  of  this  meeting 
that  in  the  future  no  action  should  be  taken,  by  public 
expression,  of  any  divergence  of  opinion  between  the 
Executive  Committee  and  the  individual  members,  unless, 
through  a  special  meeting  to  be  called,  such  public  expres- 
sion of  opinion  is  authorized." 

Mr.  Rosendale:  I  am  very  glad  that  Mr.  Hanaman 
has  offered  this  resolution.     I  was  complimented  by  the 


230  HISTORY  OF  THE  SAVINGS  BANKS 

request  of  your  Executive  Committee  to  appear  before 
the  Governor  upon  the  hearing  on  the  question  whether 
the  Los  Angeles  Bill  should  or  should  not  become  a 
law. 

Without  discussing  the  question  as  to  whether  the  Los 
Angeles  securities  are  good,  bad,  or  indifferent,  I  think 
the  question  which  we  ought  to  consider  is  the  highly  im- 
portant one  concerning  the  future  welfare  and  influence  of 
this  Association.  I  am  not  a  member  of  the  Executive 
Committee,  but,  while -discussing  the  question  before  the 
Governor,  I  recognized  the  great  value  and  importance  of 
this  Association,  and  I  also  recognized  that,  in  order  to 
have  the  Association  continue  its  influence,  it  is  of  the  ut- 
most importance  that  your  officers  and  your  Executive 
Committee  be  clothed  with  full  authority,  which  alone 
will  give  them  power. 

I  was  mortified  beyond  expression  to  find  that,  not- 
withstanding the  fact  that  after  consideration  by  your 
Executive  Committee,  and  after  action  by  your  Executive 
Committee  in  opposition  to  the  adoption  of  any  bill  other 
than  the  Krum  Bill  this  winter,  nevertheless  there  were 
found  communications  from  Savings  Banks  of  importance 
and  of  influence,  from  gentlemen  of  high  standing  both  as 
citizens  and  Savings  Bank  officers,  apparently  recommend- 
ing the  adoption  and  the  signature  of  the  Governor  to  that 
bill.  I  need  not  to  say  to  you  what  a  serious  disappoint- 
ment it  was,  not  only  to  the  members  of  the  Executive 
Committee  who  had  gone  to  Albany  in  the  faithful  dis- 
charge of  their  duties  but  I  want  to  express  here  my  ex- 
treme mortification  at  finding  such  evidence  of  want  of 
harmony  and,  if  I  may  say  so,  want  of  loyalty  to  the 
Association  to  what  I  regard  its  best  interests.  We  can- 
not always  be  right;  we  are  human.  But  we  must  confide 
our  affairs  to  men  in  whom  we  have  confidence,  and  when 
they  have  acted  for  us  it  seems  to  me  that  our  highest  and 
best  duties  demand  that  we  should  stand  by  them,  regard- 
less of  our  individual  opinions  and  in  spite  of  our  personal 
views. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    231 

I  therefore  very  heartily  approve  of  this  resolution,  and 
I  trust  that  the  Association  will  adopt  it. 

The  resolution  was  adopted. 

REPORT   OF   THE   EXECUTIVE   COMMITTEE 

The  Executive  Committee  reported  that  the  so-called 
Krum  Bill,  which  amended  the  Banking  Law  relative  to 
securities  in  which  deposits  of  Savings  Banks  might  be 
invested,  enlarging  the  scope  of  such  investments,  had 
become  a  law.  The  Committee  at  the  same  time  regis- 
tered its  objection  to  any  further  enlargement  of  the  scope 
of  investments  beyond  the  original  bill  introduced  by 
Senator  Krum. 

Attention  was  called  to  the  fact  that  a  bill  had  been  in- 
troduced by  Senator  Green  on  March  loth,  entitled  "An 
Act  to  amend  the  laws  relative  to  the  investment  of  de- 
posits of  Savings  Banks  in  the  stocks  or  bonds  of  certain 
cities." 

The  report  continued: 

Your  Committee  then  requested  that  the  Governor 
give  a  hearing  in  opposition  to  the  bill,  and  such  a  hearing 
was  granted.  Mr.  Mills  and  Mr.  Rhoades,  of  the  Execu- 
tive Committee,  and  Mr.  Simon  W.  Rosendale,  Presi- 
dent of  the  National  Savings  Bank  of  the  City  of  Albany, 
spoke  in  opposition  to  the  bill.  Senator  Green  appeared 
in  its  favor;  and  to  the  surprise  and  mortification  of  the 
members  of  the  Executive  Committee,  who  were  at  the 
hearing,  he  produced  a  number  of  individual  letters  or 
petitions,  signed  by  officers  of  different  Savings  Banks 
throughout  the  State,  urging  the  Governor  to  approve 
of  this  bill;  and  the  Governor  subsequently  signed  the 
bill. 

It  has  taken  a  number  of  years  to  convince  the  executive 


232  HISTORY  OF  THE  SAVINGS  BANKS 

officers  of  the  State  and  the  Legislature  of  the  integrity 
of  purpose  and  the  honest  interest  which  Savings  Bank 
officers  possess  in  the  interest  of  Savings  Bank  depositors 
in  the  State,  and  this  moral  force  has  become  so  great  that 
for  the  past  few  years  its  power  has  been  recognized  by 
legislator  and  executive  alike;  and  the  voice  of  Savings 
Bank  authorities,  heard  through  the  Executive  Committee 
of  this  Association,  has  been  powerful  enough  to  defeat 
bad  legislation,  and  powerful  enough  to  carry  weight  in 
securing  good  legislation.  This  feeling  has  been  so  well 
understood  in  the  Legislature  that  during  the  past  year 
not  one  single  Dormant  Account  Bill  was  even  introduced. 
Bankers  and  brokers  having  bonds  to  sell  had  come  to 
recognize  the  utter  impossibility  of  securing  by  honest  or 
dishonest  methods  the  passage  of  any  bill  which  did  not 
meet  the  approval  of  the  Association.  Therefore  it  is 
exceedingly  unfortunate  that  a  division  should  have  oc- 
curred which  has  broken  down — at  least  temporarily — 
the  strength  of  the  Association,  and,  in  all  probability, 
rendered  the  work  of  the  coming  years  harder  than  ever. 

Mr.  A.  T.  E.  Lansing,  of  the  Jefferson  County  Savings 
Bank,  presented  an  interesting  paper  on  Banking  Methods. 

"sound  money" 

The  Hon.  E.  J.  Hill,  of  Connecticut,  addressing  the 
Convention,  said: 

WTiile  we  may  not  all  agree  concerning  every  feature  of 
this  measure  (House  Bill  13,363,  ''A  Bill  to  Maintain 
the  Gold  Standard,  etc."),  of  one  thing  I  am  sure,  that, 
representing  as  you  do  more  than  two  million  depositors 
in  this  State,  and  over  a  billion  in  amount  of  the  savings 
of  your  people,  you  not  only  strive  to  guard  with  jealous 
care  and  keep  in  perfect  safety  the  trusts  committed  to 
you,  but  when  the  savings  of  the  past  are  called  for  in 
times  of  stress  and  sore  necessity,  your  duty  and  your 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    233 

pride  as  well  will  lead  you  to  meet  those  calls  with  money 
that  is  good  the  world  around  and  with  the  highest  pur- 
chasing power  everywhere. 

So  far  as  deposits  are  made  for  investment  purposes, 
they  are  a  tribute  to  your  sagacity,  and  their  great  in- 
crease is  a  testimonial  to  the  confidence  which  is  placed  in 
you ;  but  the  weekly  savings  which  are  entrusted  to  you 
represent  the  vigor  and  strength  of  active  life  which  are 
stored  and  held  till  age  and  weakness  make  their  use  im- 
perative, and  any  shrinkage  in  the  purchasing  power  of  the 
money  which  measures  these  means  just  so  much  less  of 
comfort  and  so  much  more  of  deprivation  when  old  age 
comes. 

It  is,  therefore,  to  the  everlasting  credit  of  the  Mutual 
Savings  Banks  of  this  State  that  when  the  kind  of  money 
in  which  those  deposits  should  be  paid  became  a  dis- 
puted political  question  in  '96,  you  promptly  declared, 
''that  in  our  judgment  the  future  prosperity  of  the  coun- 
try and  the  welfare  of  the  people  demand  not  only  that  the 
gold  standard  shall  be  maintained,  but  the  currency 
system  now  in  use  shall  be  so  changed  and  remodeled  as 
to  meet  and  adapt  it  to  the  increasing  needs  of  commerce, 
and  equal  in  security  and  credit  with  the  best  in  circula- 
tion by  any  of  the  civilized  nations  of  the  earth." 

The  United  States  has  no  more  right  to  put  in  circula- 
tion money  which  it  will  not  redeem  in  the  money  of  the 
standard  which  it  has  itself  proclaimed  than  an  individual 
has  to  issue  his  note  with  the  deliberate  intention  of  de- 
faulting in  its  payment. 

Hon.  Lyman  J.  Gage,  who  filled  the  position  of  Secre- 
tary of  the  Treasury  with  an  ability  equalled  by  few  men 
in  our  country's  history,  told  the  simple  truth  when  he 
said,  "The  Government  might  just  as  well  face  the  re- 
demption at  the  front  door  as  to  delay  until  it  must  take 
it  under  the  revenue  laws  at  the  back  door."  The  danger 
is  ever  present  in  our  fiinancial  system,  and  it  is  far  safer 
to  find  it  out  and  be  prepared  for  it  than  it  is  to  ignore 
it  and  have  it  find  us  unprepared,  as  it  did  in  '93. 


234  HISTORY  OF  THE  SAVINGS  BANKS 

"A  prudent  man  foreseeth  the  evil  and  hideth  himself, 
but  the  simple  pass  on  and  are  punished." 

I  commend  this  proverb,  with  all  it  implies,  not  only 
to  those  who,  having  given  little  thought  to  the  question, 
are  content  to  "let  well  enough  alone,"  but  especially  to 
those  who,  fully  reahzing  the  situation,  are  indifferent  to 
it  because  a  Congressional  election  is  approaching.  Is 
the  currency  system  of  the  United  States  always  to  be 
a  political  football,  only  to  be  kicked  back  and  forth  be- 
tween the  parties,  and,  when  the  game  is  finished,  to  be 
laid  away  as  a  trophy  of  victory,  battered  and  bruised 
and  soiled  with  the  dirt  of  party  conflict?  Three  months 
ago  the  National  Board  of  Trade  recommended  "that 
Congress  enact  such  legislation  as  may  be  necessary  to 
put  this  country  on  a  permanent  gold  basis,"  and  by 
specific  votes  declared  that  the  retirement  of  the  green- 
backs and  the  exchangeabihty  of  the  silver  dollar  for  gold 
were  essentials  to  that  end. 

On  the  5th  of  March  the  New  York  Chamber  of  Com- 
merce, upon  an  elaborate  report  prepared  by  John  Harsen 
Rhoades,  Henry  W.  Cannon,  E.  H.  Perkins,  Jr.,  August 
Belmont,  and  George  G.  Williams,  unanimously  voted 
that  "the  first  stone  in  the  foundation  of  the  structure  of 
national  credit  is  the  inviolate  character  of  its  unit  of 
value,  and  now  is  the  time  to  complete  the  Act  of  March 
14,  1900,"  and  to  that  end  favored  the  exchangeability  of 
the  silver  dollar  with  gold. 

When  you  add  to  this  the  fact  that  one  great  Com- 
mittee of  the  House  of  Representatives  has  reported  a 
bill  deliberately  putting  the  government  of  the  Philippine 
Islands  into  the  banking  business  to  maintain  the  parity 
of  a  full  legal  tender  silver  coinage  at  a  ratio  of  two  for  one, 
and  that  coinage  issued  with  the  openly  avowed  purpose 
of  perpetuating  the  wage  system  of  the  Islands  on  its 
present  silver  basis,  and  then  supplement  these  things  by 
a  report  of  the  Senate  Committee  on  the  Philippines  in 
favor  of  the  unlimited  coinage  of  a  full  legal  tender  silver 
dollar  on  private  account  as  the  currency  system  of  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    235 

Islands,  and  add  to  that  that  this  dollar  may  be  coined 
in  San  Francisco  from  American  bullion,  with  the  great 
probability  that  it  will  enter  into  American  circulation 
precisely  as  the  trade  dollar  did,  is  it  not  high  tune  that 
the  sound  money  men  of  the  United  States  should  demand 
from  their  Representatives  and  Senators,  and  their  Presi- 
dent and  Cabinet,  that  the  overwhelming  victories  of  '96 
and  1900  for  honest  money  and  a  sound  financial  system 
should  not  be  frittered  away  and  go  for  naught? 

Gentlemen,  there  is  no  room  in  a  gold  standard  system 
for  fiat  money.  The  financial  barometer  of  this  country 
to-day  is  the  accumulation  of  gold  in  the  Government 
Treasury,  and  we  watch  each  day  for  its  rise  and  fall. 
Every  dollar  of  it  above  a  fair  working  balance  should  be 
employed  in  the  industries  of  the  country,  and  is  so  used 
by  every  one  of  our  commercial  rivals.  Who  thinks  of 
looking  at  the  Treasury  holdings  of  any  European  country 
to  judge  of  the  possibilities  of  a  panic? 

It  is  fiat  money  which  has  made  impossible  every  scheme 
for  the  improvement  of  our  banking  system  since  the  Civil 
War.  The  greenbacks  should  be  paid  and  the  ultimate 
retirement  of  the  legal  tender  silver  dollar  provided  for 
now,  and  meanwhile  made  exchangeable  for  gold.  It 
could  be  done,  as  Mr.  Gage  said  to  the  banking  and 
Currency  Committees,  "without  making  a  ripple  upon 
the  financial  surface  of  the  coimtry."  He  had  the  power 
to  do  it,  and  the  courage,  but  Congress  would  not  per- 
mit it.  Charles  S.  Fairchild  had  the  courage  but  not 
the  power.  If  this  was  done,  a  banknote  issue  redeem- 
able in  gold  could  be  provided  which  would  respond  to 
every  legitimate  trade  requirement,  and  by  its  economy 
save  to  the  business  interests  of  this  country  in  the  next 
five  years  more  than  the  amount  of  the  entire  volume  of 
the  outstanding  greenbacks.  Think  of  the  difference  be- 
tween a  greenback  and  a  banknote.  So  far  as  the  is- 
suing is  concerned,  the  greenback  has  absolutely  no  rela- 
tion to  trade  and  commerce,  for  the  Government  borrows 
but  never  lends,  and  cannot  issue  currency  except  to  pay 


236  HISTORY  OF  THE  SAVINGS  BANKS 

an  existing  debt  which  represents  past  consumption  as 
the  greenback  represents  debt  incurred  in  the  Civil  War. 
But  a  bank  lends  and  is  not  supposed  to  borrow  except 
from  its  depositors,  and  when  it  issues  its  note,  it  swaps  its 
credit  for  its  customers'  credit,  and  at  the  time  of  issue 
receives  back  something  which  it  can  use  to  cancel  its 
own  obligation  when  it  is  presented  for  redemption.  One 
deals  with  the  past  and  pays  for  "horses"  which  are 
eternally  dead,  the  other  with  the  future,  and  buys  live  and 
productive  assets.  First — that  it  is  a  loan  without  in- 
terest. Second — the  sentimental  one  that  it  saved  the 
nation  in  the  Civil  War,  and  must  now  be  held  as  sacred 
as  a  soldier's  grave. 

For  reply  to  the  first  I  cite  you  the  report  on  the  pending 
bUl  on  page  7,  where  the  Actuary  clearly  proves  that  the 
cost  to  the  Government  of  maintaining  the  greenback 
since  resumption  in  '79  has  been  nearly  seven  per  cent, 
per  annum.  For  reply  to  the  second,  I  have  no  recol- 
lection that  the  "grayback"  of  the  Confederacy  had  any 
such  effect  upon  its  fortunes,  and  therefore  compelled  to 
believe  that  the  resources  of  the  North  rather  than  its 
liabilities  were  the  deciding  factor  in  that  conflict. 

The  fact  is  that  we  are  flying  in  the  face  of  the  ex- 
perience of  the  w^hole  commercial  world  by  maintaining 
a  system  of  fiat  money,  and  this  bill  recognizes  that  and 
proposes  to  get  back  slowly  but  surely  to  the  solid  ground 
of  gold  as  the  legal  tender,  silver  as  subsidiary  coin, 
and  banknotes  as  the  instrument  of  trade.  The  bill 
proposes,  first,  to  stop  the  further  coinage  of  the  silver 
dollar,  to  use  the  bullion  remaining  in  the  Treasury  for 
subsidiary  coin,  and,  when  public  necessities  require  more, 
to  begin  the  recoinage  of  the  dollar  into  subsidiary.  It 
has  been  strongly  urged  that  the  United  States  should 
follow  the  example  of  Germany  and  Japan,  in  melting 
down  and  selling  all  of  our  legal  tender  silver  which  is  not 
in  actual  circulation,  but  this  means  assuming  a  loss  of 
fifty-nine  cents  on  every  dollar  so  treated,  and  recoinage 
means  a  nominal  gain  of  about  seven  cents  on  every  doUar 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    237 

which  can  be  permanently  held  in  circulation.  The  dif- 
ference between  the  two  plans  would  aggregate  about 
three  hundred  million  dollars.  The  second  feature  of  the 
bill,  for  the  providing  for  the  maintenance  of  the  Gold 
Standard,  is  the  retirement  of  the  greenbacks.  In  my 
judgment  this  should  be  by  the  direct  and  indepen- 
dent action  of  the  Treasury,  for  they  are  a  Government 
debt  and  in  no  sense  a  bank  obligation.  The  complica- 
tions which  are  certain  to  arise  by  throwing  a  part  of  this 
burden  upon  the  banks  are  wholly  unnecessary,  and  there 
is  no  essential  relation,  even  in  point  of  time,  between  the 
withdrawal  of  the  greenback  and  the  issue  of  the  bank- 
notes, for  whenever  a  greenback  is  paid,  a  gold  dollar  will 
go  into  circulation,  and  the  banknote  is  only  a  credit  in- 
strument and  not  a  legal  tender;  but  the  Committee 
thought  it  would  be  politically  wise  to  induce  the  banks 
to  assume  the  current  redemption  of  such  an  amount  as 
could  not  be  canceled  with  the  gold  now  in  the  Treasury, 
and  in  that  way  divest  the  Treasury  more  promptly  of  its 
banking  functions,  even  if  it  did  delay  the  date  of  their 
entire  payment  somewhat.  .  .  .  Provision  is  made 
for  the  change  from  bond-secured  to  asset  note  issues, 
without  reference  to  the  present  limitation  of  three  millions 
per  month,  and  in  view  of  the  fact  that  the  present  bond- 
secured  circulation  is  over  three  hundred  and  twenty 
million  dollars,  there  is  little  question  but  that  one  hun- 
dred and  thirty  millions  of  it  would  be  promptly  changed 
in  order  to  realize  the  greatly  increased  profit  which  this 
plan  would  give. 

If  it  was  so  changed,  as  I  have  no  doubt  but  that  it 
would  be,  the  entire  volume  of  the  greenbacks  would  be 
retired  and  canceled  within  twenty-five  years,  and  any 
increase  of  the  present  amount  of  banknote  circulation 
would  hasten  the  happy  day.  All  of  the  United  States 
could  join  in  singing  the  old  hymn,  "Believing,  we  rejoice 
to  see  the  curse  removed,"  and  so  far  as  the  world  is  con- 
cerned, fiat  money  would  be  dead  and  buried.  Seven 
years  ago,  when  I  entered  Congress  and  was  appointed 


238  HISTORY  OF  THE  SAVINGS  BANKS 

by  Mr.  Reed  as  a  member  of  the  Banking  and  Currency 
Committee,  I  was  a  sincere  and  enthusiastic  advocate 
of  a  bond-secured  currency  and  an  independent  bank 
system.  Persistent  inquiry,  constant  study,  and  patient 
investigation  have  brought  me  squarely  to  a  behef  in 
asset  note  issues  and  branch  banks,  and  I  beheve  will 
bring  any  man  there  who  will  pursue  the  subject  with  an 
open  mind.  I  declare  it  as  my  honest  belief  as  a  bank 
officer,  with  a  modest  interest  in  the  game,  that  the  sole 
stake  which  the  banks  are  now  playing  for,  in  dealing 
out  banknotes,  is  the  profit  on  the  bonds,  and  that  not  a 
single  dollar  of  the  three  hundred  and  twenty  millions  cir- 
culation now  outstanding  remains  out  with  reference  to 
any  commercial  transaction.     .     .     . 

How  could  it  be  otherwise  in  view  of  the  fact  that  at 
least  thirty-two  million  dollars  is  locked  up  in  premiums 
when  it  should  be  available  for  commercial  purposes? 
As  the  national  banking  system  was  instituted  for  the 
purpose  of  making  a  market  for  Government  bonds,  it 
is  only  fulfilling  the  plans  of  its  creator;  but  conditions 
have  changed  in  forty  years,  and  there  is  no  reason  now 
why  one  hundred  and  ten  dollars  of  capital  should  be 
locked  up  in  bonds  in  order  to  put  one  hundred  dollars  of 
notes  into  circulation. 

This  bill  gives  an  asset  note  issue  of  sixty  per  cent,  of 
the  capital  with  a  tax  of  one  fourth  of  one  per  cent,  on  the 
first  twenty  per  cent,  and  one  and  one  fourth  per  cent, 
tax  on  the  other  forty  per  cent,  and  a  profit  to  the  banks, 
above  all  expenses,  taxes,  interest  on  redemption  funds, 
cost  of  carrying  greenbacks,  etc.,  of  at  least  four  and  one 
third  per  cent,  or  a  corresponding  reduction  of  interest 
rates  to  the  country,  or,  preferably,  a  fair  division  between 
the  two. 

On  the  three  hundred  and  twenty  millions  outstanding 
it  means  a  gain  to  somebody  of  more  than  ten  millions 
annually,  and  a  very  much  larger  amount,  proportion- 
ately, in  those  portions  of  the  country  where  higher  inter- 
est rates  prevail.     If  three  biUions  of  deposits  are  safe, 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK     239 

the  three  hundred  of  asset  notes  would  be.  .  .  .  In  my 
opinion  it  is  safe,  far  safer  than  the  banknote  systems  of 
any  other  country,  and  fully  as  safe  as  the  present  bond- 
secured  banknote,  for  I  do  not  believe  that  a  single  dollar 
in  either  case  could  ever  be  defaulted. 

The  principle  of  asset  banking  is  equally  applicable  to 
large  or  small  banks.  The  difference  between  the  two  is 
that  the  large  bank  is  an  ever-present  help  in  time  of 
trouble,  and  the  little  one  is  apt  to  be  an  ever-present 
trouble  when  help  is  needed. 

Of  course  economy  of  management  is  found  in  the 
large  bank  rather  than  the  small  one,  but,  if  we  are  to  be 
controlled  by  our  prejudices,  we  must  be  willing  to  pay 
for  the  privilege. 

With  an  increased  profit  to  the  banks  shown,  and  with 
safety  provided  for,  the  unquestionable  advantages  to 
the  people  of  an  elastic  banknote  issue  are  so  great  that 
it  would  be  presumption  to  discuss  them  before  a  bankers 
convention. 

I  wish  to  bring  to  your  careful  attention  the  subject  of 
branch  banks.  When  a  man  finds  himself  at  variance 
with  the  universal  opinion  of  mankind  it  is  high  time  for 
him  to  doubt  his  own  infallibility,  and  this  is  the  position 
in  which  the  opponent  of  the  branch  bank  system  is 
placed  to-day,  for,  after  a  careful  examination,  including 
the  laws  of  forty  countries,  I  can  find  no  government  in 
the  world  where  branch  banks  are  not  permitted  except 
our  own;  and  even  here  they  are  excluded  by  the  laws  of 
only  twenty  States  and  by  the  National  Bank  Act,  and  even 
that  act  permits  them  where  the  State  Banks  come  into 
the  system  with  branches  already  in  existence,  France 
has  a  branch  of  the  Bank  of  France  in  every  department  of 
the  Republic.  Europe  and  South  and  Central  America 
are  solidly  in  favor  of  the  system. 

Voyaging  around  the  world  last  year,  I  found  branches 
of  British  banks  throughout  the  Philippines  acting  as 
commercial  drummers  for  English  trade  and  financial 
agents  for  our  Government  at  the  same  time. 


240  HISTORY  OF  THE  SAVINGS  BANKS 

German,  English,  Russian,  every  one  our  commercial 
rivals  in  the  Orient,  but  not  an  American  bank  and  hardly 
an  American  ship.  All  through  Japan,  EngUsh,  German, 
and  Russian  banks  are  taxing  American  trade  by  excessive 
charges  for  exchange  on  London,  and  from  Vladivostok 
to  Moscow,  straight  through  Siberia,  German  branch 
banks  and  department  stores  are  laying  foundations  for 
the  future  trade  of  what  is  sure  to  be  one  of  the  great 
markets  of  the  world. 

In  the  city  of  London  alone  there  are  fifty-eight  in- 
corporated banks,  with  four  hundred  and  fifty-three  mil- 
lion dollars  of  capital,  and  one  hundred  and  seventy-sLx 
millions  of  surplus  and  undivided  profits  employed  in 
international  trade,  with  twenty-two  hundred  and  fifty- 
three  branches  scattered  all  over  the  world,  extending 
English  prestige  and  developing  English  trade  everywhere, 
and  we  pay  tribute  to  them.  The  Committee  on  Banking 
and  Currency  could  see  no  reason  why  American  capital 
and  American  enterprise  should  not  do  its  share  in  pro- 
moting American  trade  in  other  lands,  and  long  for  the 
time  when  the  American  national  banks  will  fly  the  Ameri- 
can flag  and  care  for  American  interests  in  all  the  great 
capitals  of  the  world.  In  Germany  the  Imperial  Bank, 
with  average  loans  of  $138,030,935,  had  a  percentage  of 
expense  of  twenty-three  tenths,  maintaining  330  branches. 
The  Bank  of  France,  with  392  branches  and  average  loans 
of  $157,040,000,  had  a  percentage  of  expense  of  nine- 
tenths. 

When  we  consider  that  both  of  these  institutions  per- 
form much  of  the  work  transacted  by  the  Treasury  here, 
and,  in  addition  to  this,  that  the  Bank  of  France  is  com- 
peUed  by  law  to  discount  notes  as  small  as  one  doHar  in 
amount,  which  adds  greatly  to  the  expense  account,  the 
difference  in  cost  of  maintenance  of  the  branch  and  inde- 
pendent systems  is  plainly  seen.     .     .     . 

That  the  expense  account  is  a  very  important  factor 
in  affecting  the  general  result  is  clearly  shown  by  the 
strenuous  claims  put  forward  by  the  independent  banks 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    241 

that  they  could  not  compete  with  the  branch  system,  and, 
therefore,  that  the  existing  banks  would  be  driven  out  of 
business.  I  admit  that  in  many  cases  this  would  prove 
true,  but  in  the  end  it  would  mean  the  survival  of  the 
fittest  and  result  in  inestimable  advantage  to  millions  of 
borrowers  who  have  a  right  to  have  their  welfare  consid- 
ered in  framing  legislation.  And  I  know  of  no  reason  why 
a  bank  should  be  restricted  to  one  place  of  business  any 
more  than  an  insurance  company,  for  a  fair  distribution 
of  risks  is  just  as  essential  to  safety  in  one  case  as  in  the 
other. 

But  I  do  not  believe  that  the  stockholders  of  any  bank 
which  has  a  reason  for  existence  would  suffer  by  the 
change,  for  every  such  institution  well  established  could 
enlarge  its  field  of  work  without  a  proportionate  increase 
of  expense.  The  process  is  going  on  every  day  now,  on 
the  "community  of  interest"  plan,  and  it  is  far  better 
to  have  it  done  under  the  law  than  outside  of  it.  How 
absurd  it  is  to  fear  that  the  parent  bank  will  suck  de- 
posits from  the  branches  and  give  back  nothing  in 
return.  Was  it  for  this  or  the  reverse  of  this  that  the 
French  Parliament  compelled  the  Bank  of  France  to 
establish  branches  in  every  department?  Is  it  to  aggran- 
dize London,  or  to  build  up  the  Colonies  and  so  make 
money  for  themselves,  that  the  British  Joint  Stock 
Banks  have  followed  the  English  drumbeat  around  the 
world? 

Do  independent  country  banks  send  their  funds  to 
their  reserve  agents  at  one  and  one  half  or  two  per  cent., 
when  good  loans  are  offered  at  home  at  five  or  six  per  cent.? 
And  now  as  Savings  Banks  managers  and  investors  in 
Government  bonds,  as  officers  and  stockholders  in  na- 
tional banks,  what  is  to  be  your  policy  in  the  future?  If 
the  character  of  security  is  to  be  changed,  admitting  the 
bonds  of  States  and  cities,  it  only  adds  to  your  troubles 
by  bringing  another  buyer  into  the  field  and  lessening  the 
returns  from  your  investments.  To  longer  depend  on 
Government  bonds  as  a  basis  for  circulation  is  impossible, 


242  HISTORY  OF  THE  SAVINGS  BANKS 

for  the  requirements  of  the  sinking  fund  will  soon  exhaust 
the  supply,  and  the  increasing  premium  is  even  now  forc- 
ing the  withdrawal  of  circulation  as  fast  as  the  law  per- 
mits. There  is  no  probability  whatever  of  bond  issues  in 
the  future,  for  whatever  else  of  good  or  ill  came  to  us  from 
the  Spanish  War,  it  demonstrated  as  never  before  that  the 
possibilities  of  taxation  in  this  country  have  hardly  been 
touched.  It  is  a  bit  of  unwritten  history  of  that  war  that 
at  its  beginning  Secretary  Gage  intended  to  issue  but  one 
hundred  million  dollars  of  bonds  for  immediate  contin- 
gencies, and  to  rely  upon  taxation  for  funds  to  carry  it  to  a 
successful  conclusion.  He  was  overruled  by  those  who 
did  not  realize  as  he  did  the  resources  of  this  great  country, 
or  who  lacked  the  faith  which  he  possessed  in  the  patriot- 
ism of  the  people. 

As  a  result,  two  hundred  millions  of  bonds  were  issued, 
of  which  one  half  are  still  outstanding,  on  which  we  must 
continue  to  pay  interest  till  1908  or  buy  them  at  heavy 
premiums. 

REMARKS   OF   HON.    LYMAN  J.    GAGE 

Mr.  Lyman  J.  Gage,  former  Secretary  of  the  Treasury, 
said:  I  thought  on  this  occasion  that  I  was  going  to  have 
the  pleasure  of  listening,  and  I  did  not  for  a  moment  sus- 
pect that  I  should  be  called  upon.  I  want  to  say,  however, 
that  I  have  not  been  disappointed  in  my  expectation 
of  being  instructed.  I  sympathize  absolutely  and  fully 
with  all  the  principles  so  ably  presented  and  so  eloquently 
expressed  by  the  Congressman  from  Connecticut,  Mr. 
HUl.  It  would  be  foolish,  idle,  and  like  an  anti-climax  for 
me  to  undertake  to  add  anything  to  the  force  of  his  argu- 
ment. 

For  a  number  of  years  it  was  my  duty  and  privilege  to 
come  into  very  close  contact  wdth  the  financial  question 
as  our  country  is  interested  in  it,  and  in  all  its  aspects  which 
have  been  so  well  covered  here  to-day.  In  that  study  I 
have  had  frequent  conferences  with  the  gentleman  who 
has  just   addressed   you.     My   mind  has   always  been 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    243 

strengthened  and  enlightened  by  my  discussions  with  him. 
There  are  others,  not  so  many  as  there  should  be,  but 
enough  to  give  promise  of  great  usefulness  to  the  country 
in  the  future  in  their  labors  in  the  Congressional  hall,  and 
there  are  many  outside  of  that  body  who  are  studying 
carefully,  conscientiously,  and  intelligently  these  great 
problems. 

It  is  the  fashion  too  much,  gentlemen,  to  make  light 
of  the  serious  study  of  this  question.  If  you  will  not 
study  thoroughly  and  carefully  so  as  to  get  at  the  prin- 
ciples which  make  so  eagerly  for  the  welfare  of  the  coun- 
try, if  you  wiU  not  study  them  thoroughly  so  that  you  are 
able  to  grasp  all  of  the  principles  in  detail  for  your  own 
sakes,  you  should  do  so  to  give  in  some  degree  confidence 
to  these  men  who,  standing  apart  without  any  interest  of 
their  own  to  serve,  are  studying  these  problems  for  you 
and  trying  to  accomplish  something  for  your  everlasting 
benefit. 

Mr.  Rhoades:  I  am  sure  that  I  echo  the  sentiment  of 
every  gentleman  here  present  in  saying  how  much  we  have 
all  enjoyed  this  address  by  the  honorable  representative 
in  Congress  on  this  very  important  question.  As  Sav- 
ings Bank  officers  we  are  directly  interested  in  what 
makes  for  the  welfare  of  the  masses  of  our  working  people. 
More  so,  perhaps,  than  any  one  else  because  we  are  their 
trustees.  We  are  the  custodians  of  their  thrift.  If  these 
people  are  to  remain  prosperous,  if  this  country  is  to 
grow,  if  employment  is  to  be  steady  and  regular,  the  basis 
of  our  currency  upon  which  their  wages  rest  must  be  in- 
violate in  its  character.  Therefore,  we,  as  Savings  Bank 
officers,  endorse  any  plan  that  is  feasible  which  will  make 
the  obligations  of  the  Government  redeemable  now  and 
at  all  times  in  a  gold  dollar. 

Therefore  he  may  take  back  to  Washington  (I  am  sure 
from  all  of  us  here)  the  feeling  that  he  has  our  hearty 
cooperation  in  any  scheme  which  will  bring  about  that 
result.  The  currency  of  the  country  must  be  based  upon 
the  assets  of  the  banks.     You  may  put  off  the  day,  Con- 


244  HISTORY  OF  THE  SAVINGS  BANKS 

gress  may  delay  and  hang  back,  but  in  the  end  that  has 
got  to  be  the  result,  and  the  sooner  that  comes  the  sooner 
this  country  is  going  to  be  established  permanently  upon 
a  basis  of  prosperity,  and  the  sooner  it  is  going  to  be  for 
the  benefit  of  the  people  at  large. 


CHAPTER  X 


Tenth  Anniversary  of  the  Association — Work  of  the  Executive 
Committee — Committee  to  Consider  the  Question  of  Estab- 
lishing Branch  Banks — An  Able  Paper  on  the  Currency  Ques- 
tion by  Hon.  Horace  White — Other  Notable  Addresses — 
Legislative  Hearing  on  the  Mortgage  Tax  Bill. 


HE  Tenth  Annual  Convention  was  one  of  the  most 
notable  in  a  long  series  of  similar  gatherings.     It 


T 

-■^  was  held  on  May  12,  1903,  in  the  splendid  new 
building  of  the  Chamber  of  Commerce,  with  an  unusually 
large  attendance. 

In  his  address,  President  Charles  A.  Schieren  said: 

Gentlemen  and  members  of  the  Savings  Banks  Asso- 
ciation: I  bid  you  welcome  to  this  the  tenth  anniversary 
of  our  Association ;  I  welcome  you  to  this  palatial  building 
which  stands  as  a  noble  monument  to  the  commercial 
enterprise  of  this  city. 

It  is  now  a  decade  since  the  Savings  Banks  Association 
of  this  State  was  organized,  and  it  may  be  of  interest  to 
give  a  brief  history  of  its  growth  during  that  period.  The 
official  report  for  the  year  1893  of  the  Banking  Depart- 
ment at  Albany  is  as  follows : 

Due  to  depositors $629,358,395 

Number  of  depositors .  1,593,804 

The  report  for  1903  shows  as  follows: 

Due  to  depositors $i)077,383,743 

Number  of  depositors 2,275,385 

24s 


246  HISTORY  OF  THE  SAVINGS  BANKS 

showing  a  gain  during  the  ten  years  in  deposits$448,025,348 
and  in  the  number  of  depositors  681,579,  an  increase  of 
seventy  per  cent,  in  deposits  and  forty-three  per  cent,  in 
depositors.  These  figures  speak  volumes  for  the  thrift 
and  enterprise  of  our  people. 

While  abroad  last  year  I  noticed  an  article  published 
in  the  London  Times  entitled  "English  Thrift."  It  gave 
the  statistics  of  the  growth  of  Savings  Banks  in  England. 
The  report  gave  the  number  of  depositors  in  the  Post 
Office  Savings  Banks  at  8,046,680,  and  their  deposits  at 
£138,818,175,  or  $694,093,750.  It  also  reported  the  num- 
ber of  depositors  of  the  Trustees'  Savings  Banks  (a  system 
of  Savings  Institutions  somewhat  similar  to  our  Savings 
Banks)  1,601,485,  and  their  deposits  at  £57,196,458,  or 
$275,982,293.  I  was  somewhat  surprised  at  the  low  aver- 
age of  the  Postal  Savings  Banks. 

The  average  deposits  in  the  Postal  Savings  Banks  were 
$86.25,  and  the  average  in  the  Trustees'  Savings  Banks 
$172.25,  the  average  of  our  depositors  ranges  much  higher  ac- 
cording to  the  report,  our  average  for  this  year  (1903)  is  $4 2 9 
per  depositor.  However,  both  the  EngUsh  Postal  Savings 
Banks  and  the  Trustees'  Savings  Banks  limit  their  deposits 
to  £200,  or  $1 ,000,  but  even  with  such  a  limitation  our  aver- 
age would  still  be  higher  proportionately  than  the  EngHsh. 

It  is  most  significant  that  the  number  of  depositors 
in  the  Postal  Savings  Banks  is  unusually  large,  and  their 
average  deposits  low,  which  proves  that  this  institution  is 
especially  popular  and  most  beneficial  to  the  masses.  It 
seems  to  reach  a  class  of  depositors  which  we  faU  to  reach, 
who  need  some  means  to  deposit  their  surplus  earnings 
for  safekeeping.  I  have  especial  reference  to  the  farmers 
and  laborers  in  the  rural  districts  who  Uve  away  from  all 
banking  facilities.  At  the  present  our  people  who  live 
in  the  rural  districts  do  not  enjoy  the  same  privilege. 

In  the  same  copy  of  the  London  Times  appeared  another 
interesting  article  entitled  "National  Money  Boxes," 
which  gave  a  flood  of  fight  on  conditions  and  prosperity 
of  these  two  savings  institutions.     The  writer  criticised 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    247 

them  severely,  claiming  that  these  institutions,  while  bene- 
ficial in  a  way,  proved  a  burden  to  the  taxpayer.  The 
Government  has  to  pay  the  deficits  constantly  arising 
in  their  management.  It  seems  that  the  Savings  Bank 
report  suggested  a  reduction  in  the  rate  of  interest  paid 
on  deposits  from  two  and  three  quarters  to  two  and  one 
half  per  cent,  in  order  to  meet  the  current  expenses  for 
the  year,  showing  that  our  American  depositor  has  quite 
an  advantage  in  the  rate  of  interest  over  his  English  cou- 
sin. Judging  from  this  article,  the  English  Postal  Savings 
Banks  system  does  not  seem  to  be  a  financial  success  to  the 
Government ;  it  is,  however,  a  great  convenience  and  benefit 
to  the  people.  The  industrial  development  of  our  country 
during  the  last  ten  years  has  been  marvelous;  it  has  sur- 
prised the  whole  civilized  world  and  has  made  the  United 
States  the  foremost  commercial  nation  of  the  world. 

We  are  largely  indebted  for  this  proud  position  to  the 
enterprise  and  energy  of  our  people,  especially  to  the 
thrifty  mechanics  and  artisans  who  by  their  natural 
ingenuity  are  constantly  inventing  improvements  in  labor- 
saving  machinery  and  substituting  machinery  for  hand- 
labor,  which  enables  our  manufacturers  to  produce  their 
goods  cheaper  and  better  than  those  made  by  hand. 
American  goods  are  popular  and  in  demand  everywhere, 
and  we  can  now  compete  in  the  markets  of  the  world. 

While  we  have  made  rapid  strides  in  our  exports,  it  is, 
after  all,  our  domestic  or  home  trade  that  shows  our  great- 
est gain.  The  figures  are  astounding.  The  last  official 
statistics  report  our  exports  at  over  a  billion  dollars  an- 
nually, this  large  sum,  it  is  estimated,  constitutes  only  five 
per  cent,  of  the  volume  of  our  domestic  trade.  This  proves 
conclusively  that  our  people  are  prosperous.  While  Ameri- 
cans are  generally  considered  extravagant  in  their  mode  of 
living,  the  figures  of  the  last  report  of  our  Savings  Banks 
proves  that  they  are  also  frugal,  are  anticipating  a  rainy  day, 
and  are  anxious  to  lay  by  some  of  their  hard  earnings.  We 
should  encourage  the  people  to  be  prudent  in  times  of 
prosperity. 


248  HISTORY  OF  THE  SAVINGS  BANKS 

Those  who  attended  the  hearings  at  Albany  must  have 
been  impressed  with  the  lack  of  knowledge  displayed  by 
some  members  of  the  Legislature  in  reference  to  the  laws 
governing  and  regulating  the  Savings  Banks  of  our  State. 
It  has  been  suggested  that  we  establish  a  Bureau  of  In- 
formation, or,  rather,  Education,  publishing  documents 
of  an  educational  character,  giving  a  complete  history 
of  the  Savings  Banks  of  this  State,  and  embodying  the 
various  laws  and  restrictions  governing  Savings  Insti- 
tutions. Such  documents  should  be  mailed  and  dis- 
tributed among  all  niembers  of  the  Legislature  at  the 
opening  of  the  session  for  the  benefit  of  new  members  of 
the  Legislature,  giving  them  a  thorough  knowledge  of  the 
laws  governing  Savings  Banks.  There  seems  to  be  a 
disposition  on  the  part  of  some  bankers  to  rush  to  the  Leg- 
islature and  introduce  bills  legalizing  investments  in  rail- 
road bonds  for  our  Savings  Banks.  It  is  of  the  utmost 
importance  that  our  Association  discourage  every  at- 
tempt made  in  that  direction,  unless  the  bonds  are  ap- 
proved by  the  Executive  Committee. 

WORK   OF   THE  EXECUTIVE   COMMITTEE 

The  Executive  Committee  elected  at  the  previous 
meeting  of  the  Savings  Banks  Association  was  called  to- 
gether on  the  14th  day  of  November,  1902,  by  President 
Schieren. 

Mr.  Conklin  was  elected  Secretary,  and  W.  B.  Van 
Rensselaer  Chairman,  of  the  Executive  Committee. 

The  attention  of  the  Executive  Committee  was  called 
to  the  fact  that  some  of  the  trust  companies  and  depart- 
ment stores  were  practically  carrying  on  a  Savings  Bank 
business.  The  Chairman  of  the  Executive  Committee 
was  appointed  Chairman  of  a  sub-committee  of  five  to 
draft  a  bill  to  be  introduced  in  the  Legislature  to  remedy 
the  evils  complained  of,  and  to  report  the  same  to  the 
next  meeting  of  the  Executive  Committee.    The   sub- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    249 

committee  was  as  follows:  W.  B.  Van  Rensselaer,  Chair- 
man; Messrs.  John  Harsen  Rhoades,  Greenwich  Savings 
Bank,  New  York  City;  Simon  W.  Rosendale,  National 
Savings  Bank,  Albany;  Edward  S.  Dawson,  Onondaga 
County  Savings  Bank,  Syracuse;  and  David  Hoyt,  Mon- 
roe County  Savings  Bank,  Rochester. 

This  Committee  had  several  conferences  with  Mr.  Kil- 
burn,  Superintendent  of  Banks,  and  with  their  attorney, 
Mr.  Wickersham,  resulting  in  the  preparation  of  a  bill 
which  was  reported  to  the  Executive  Committee  at  a  meet- 
ing held  January  6,  1903.  This  bill,  as  amended  by  the 
Executive  Committee  at  the  request  of  Mr.  Schieren, 
was  introduced  by  Senator  Marshall  to  the  Senate,  and 
it  was  referred  to  the  Committee  on  Banks.  There  were 
two  hearings  on  the  measure  before  the  Committee,  at 
which  so  much  opposition  developed  that  it  was  thought 
wise  to  modify  the  restrictions  contained  in  the  bill  so  as 
to  meet,  if  possible,  the  principal  objections  raised  at 
the  hearing.  A  new  bill  was  prepared  and  was  substi- 
tuted by  Senator  Marshall.  The  opposition  of  the  trust 
companies  was  so  bitter  that  even  the  modified  bill  was 
not  acceptable  to  them,  and  Senator  Marshall  was  unable 
to  get  the  Committee  on  Banks  to  report  on  the  bUl. 

THE   CURRENCY  QUESTION 

The  Hon.  Horace  White  addressed  the  Convention  on 
the  subject  of  the  currency  as  follows : 

Gentlemen:  It  is  the  usual  custom  of  governments  to 
perform  no  duty  to-day  which  can  be  postponed  till  to- 
morrow. This  helps  us  to  explain  the  fact  that  although 
the  end  of  the  national  bonded  debt  is  not  far  distant, 
and  although  its  termination  will  be  the  end  of  the  present 


250  HISTORY  OF  THE  SAVINGS  BANKS 

bank-note  system,  no  steps  have  been  taken  to  meet  that 
eventuahty  or  to  provide  a  currency  to  take  its  place.  In- 
stead of  meeting  the  situation  squarely,  as  it  must  be  met 
soon,  there  has  been  an  attempt  to  avoid  it  by  artificially 
prolonging  the  existence  of  the  debt.  By  the  act  of 
March  14,  1900,  Congress  provided  for  the  conversion  of 
certain  bonds,  maturing  within  a  short  time  into  others 
bearing  a  lower  rate  of  interest  and  running  thirty  years. 
Then  a  comparison  was  made  between  the  amount  of 
interest  payable  on  the  old  bonds  and  on  the  new  ones 
for  this  short  time,  and  a  saving  was  made  to  appear  by 
conveniently  ignoring  the  interest  for  the  remainder  of  the 
thirty  years.  This  process  of  conversion  is  even  now  go- 
ing on,  and  although  the  Government  has  $151,270,348 
deposited  in  national  banks  drawing  no  interest,  and 
$70,000,000  additional  lying  idle  in  the  Treasury,  it  is 
issuing  bonds  to  run  thirty  years  at  two  per  cent,  interest. 
Dispatches  are  pubhshed  from  time  to  time  felicitating 
the  Treasury  Department  on  its  success  in  thus  heaping 
up  unnecessary  obligations  for  the  future.  Such  a  trans- 
action is  acquiesced  in  because  the  people  do  not  perceive 
the  difference  between  a  government  and  a  private  in- 
dividual or  corporation  in  the  use  they  make  of  money. 
With  a  private  firm  or  corporation,  the  question,  whether 
it  is  best  to  pay  its  debts  at  maturity  or  to  have  them  ex- 
tended, is  determined  by  the  rate  of  interest.  It  is  en- 
gaged in  a  gainful  occupation,  and  if  it  can  make  more 
money  by  having  the  debt  extended  than  it  can  save  by 
paying  it  and  stopping  the  interest,  it  wall  naturally  elect 
to  have  it  extended;  otherwise  not. 

Now  the  Government  is  not  engaged  in  any  gainful  occu- 
pation. Its  only  investment  for  surplus  funds  is  in  the 
purchase  and  extinction  of  its  own  debts.  When  it  ex- 
tends a  debt,  which  it  might  pay  with  its  surplus,  and 
deposits  that  surplus  in  banks  without  interest,  it  makes  a 
donation  to  the  depository  banks.  That  is  what  the  Gov- 
ernment is  now  doing  on  a  large  scale.  It  is  at  best  a 
wasteful  operation.     The  Government  is  not  doing  this  on 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    251 

account  of  any  special  tenderness  to  the  banks,  but  in 
order  to  stave  off  the  settlement  of  the  currency  question. 
Such  a  transaction  would  not  have  been  possible  at  any 
time  between  the  end  of  the  Civil  War  and  the  election 
of  1896.  As  long  as  the  Democrats  were  united  and 
self-confident  they  kept  a  vigilant  watch  on  the  operations 
of  the  Treasury  and  met  every  false  step  with  an  unsparing 
criticism.  The  Repubhcan  leaders  who  prepared  this 
needless  and  costly  extension  of  the  national  debt  would 
never  have  dared  to  propose  such  a  measure  if  they  had 
been  confronted  with  a  vigorous  and  sane  opposition. 
They  took  advantage  of  the  demoralization  of  their  politi- 
cal opponents,  not  to  make  a  donation  to  the  depository 
banks,  although  that  is  what  it  amounts  to,  but  to  spare 
themselves  the  trouble  of  dealing  with  the  whole  bank 
question  in  a  rational  manner.  They  succeeded  in  post- 
poning the  task  for  only  two  years,  however.  At  the  last 
session  of  Congress  this  question  was  rumbling  loudly 
in  both  houses.  Both  the  Aldrich  Bill  and  the  Fowler 
Bill  were  ripe  for  general  discussion  if  not  for  enactment, 
and  they  will  be  among  the  burning  issues  of  the  next 
Congress. 

Why  did  not  the  debt  extension  of  1900  have  the  effect 
of  postponing  the  currency  crisis  for  a  longer  time?  What 
does  that  crisis  consist  of?  It  consists  of  a  deficiency  of 
the  paper  media  of  exchange,  which  deficiency  is  becoming 
more  pronounced  and  serious  with  the  increase  of  popu- 
lation and  business.  These  media  of  exchange  may  be 
classed  in  two  grand  divisions:  government  paper  and 
bank  paper.  The  former  is  a  fixed  quantity.  Under 
existing  law  it  cannot  be  greater  or  less  at  one  time  than 
at  another.  The  latter  is  of  two  kinds:  bank  deposits 
and  bank-notes.  There  is  no  limit  to  bank  deposits  ex- 
cept the  amount  of  business  to  be  transacted  with  checks, 
drafts,  etc.  This  medium  of  exchange  is  elastic  and  self- 
regulating.  The  clearing  house  is  its  most  striking 
exponent  and  visible  manifestation.  When  business  is 
active  the  clearing  house  exchanges  increase  in  volume. 


252  HISTORY  OF  THE  SAVINGS  BANKS 

When  it  is  dull  they  decrease.  In  other  words,  the  bank 
credit  that  may  be  transferred  by  means  of  checks,  drafts, 
and  bills  of  exchange,  rises  and  falls  automatically.  It  is 
an  ideal  condition,  and  it  is  the  only  ideal  thing  in  our 
whole  system,  unless  the  gold  certificates  may  be  con- 
sidered. The  amount  of  individual  deposits  in  national 
banks  alone,  against  which  checks  might  have  been  drawn 
on  the  15th  day  of  September,  1902,  was  $3,209,273,893. 
The  amount  in  State  and  private  banks  and  trust  com- 
panies was  probably  one  half  as  much  more,  making  a 
total  of  $4,813,960,834.  At  that  date  the  amount  of 
bank-notes  in  circulation  was  $352,383,259,  of  which 
about  $34,000,000  was  in  course  of  retirement,  leaving 
$317,991,809  as  the  net  amount.  Thus  the  total  amount 
of  bank  paper  used  in  effecting  the  exchanges  of  the  coun- 
try was  $5,166,344,093,  seven  per  cent,  of  which  consisted 
of  circulating  notes  and  ninety- three  per  cent,  of  deposits. 

In  addition  to  the  bank-notes  in  circulation  there  ex- 
isted legal  tender  notes  $369,671,876,  and  silver  certifi- 
cates, silver  dollars,  and  subsidiary  coins  $624,521,402. 
These  may  be  classed  as  fiduciary  circulation  issued  by  the 
Government,  amounting  in  the  aggregate  to  $992,193,278. 
The  amount  of  gold  coin  and  gold  certificates  in  circulation 
at  the  same  time  was  $929,110,114.  The  phrase  "in  cir- 
culation" means  available  for  that  purpose.  It  does  not 
include  the  $150,000,000  in  the  Treasury  reserved  for  the 
redemption  of  legal  tender  notes. 

I  said  that  our  currency  crisis  consists  of  a  shortage  of 
one  kind  of  our  fiduciary  circulation,  that  is,  of  bank-notes, 
a  deficiency  which  must  grow  more  serious  with  the  in- 
crease of  population  and  trade.  The  fiduciary  circula- 
tion issued  by  the  Government  is  not  capable  of  enlarge- 
ment, and  no  sane  person  desires  its  enlargement.  To 
increase  it  would  require  a  change  in  our  laws,  making  the 
volume  of  the  currency  dependent  upon  the  whims  of  any 
chance  majority  in  Congress.  A  few  years  ago  there  was 
a  political  party  which  proposed  that  the  Government 
should  issue  new  legal  tender  notes  against  products  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    253 

various  kinds  stored  in  warehouses,  the  amount  of  notes 
to  be  limited  only  by  the  amount  of  products.  I  need  not 
argue  against  that  bedlamite  scheme.  I  allude  to  it  only 
as  showing  what  shape  any  new  scheme  for  increasing  the 
Government's  fiduciary  circulation  would  probably  take. 

Can  we  expect  relief  from  an  increase  of  the  national 
bank  circulation  as  the  law  stands  now?  There  has 
never  been  a  year  in  our  history  when  the  growth  of  pop- 
ulation and  business  has  been  more  rapid  than  in  1902. 
There  has  never  been  one  in  which  the  demand  for  in- 
struments of  exchange  has  been  keener.  This  is  proved 
both  by  the  increase  of  $235,000,000  in  bank  deposits  and 
of  $57,594,400  in  gold  certificates.  The  latter  represents 
gold  taken  from  the  mine  and  put  into  the  most  convenient 
shape  for  use  as  a  circulating  medium.  It  is  the  most 
expensive  medium  known,  except  one;  that  one  is  our 
national  bank  circulation.  The  evidence  that  the  latter 
is  the  more  costly  of  the  two  is  found  in  the  fact  that  the 
bank-note  circulation  decreased  about  $2,000,000  during 
the  fiscal  year  1902,  while  gold  certificates  increased 
upward  of  $57,000,000.  Practically  the  only  method  of 
getting  any  addition  to  the  kind  of  currency  that  passes 
from  hand  to  hand  is  by  depositing  gold  in  the  Treasury 
and  receiving  certificates  in  denominations  not  smaller  than 
$20.  That  this  kind  of  currency  has  advantages  is  not 
to  be  denied.  Up  to  a  certain  percentage  of  the  whole 
gold  is  indispensable.  Beyond  that  percentage  it  repre- 
sents a  needless  expenditure  of  capital  to  accomplish  a 
given  result. 

The  act  of  March,  1900,  contained  other  clauses  in- 
tended to  increase  the  national  bank  circulation.  One  of 
these  authorizes  the  issuing  of  bank-notes  to  the  par  value 
of  the  bonds  deposited.  This  was  quite  proper.  The 
law  ought  to  have  been  such  from  the  beginning.  Another 
clause  reduced  by  one  half  the  tax  on  bank-notes  where 
they  are  secured  by  the  new  two  per  cent,  bonds.  There 
was  no  objection  to  that.  The  result  of  these  two  meas- 
ures was  an  immediate  enlargement  of  the  volume  of  cir- 


254  HISTORY  OF  THE  SAVINGS  BANKS 

culation  by  about  $30,000,000,  followed  by  a  fresh  decline, 
however;  and  although  the  Secretary  of  the  Treasury  has 
tried  various  artificial  stimulants  to  induce  the  banks  to 
take  out  more  currency,  the  bank-note  circulation  is  prac- 
tically moribund. 

When  a  bank  takes  out  circulating  notes  it  engages,  per- 
force, in  a  bond  speculation.  The  bank  is  an  active  busi- 
ness enterprise.  It  expects  to  earn  the  average  rate  of 
profit  in  the  community  of  which  it  is  a  member.  As  a 
purchaser  of  bonds  it  has  to  bid  against  retired  capitalists, 
Savings  Banks,  trustees  of  decadent  estates,  and  other 
investors  to  whom  security  is  a  higher  consideration  than 
profit.  Not  infrequently  the  Government  itself  comes 
into  the  market  as  a  competing  buyer.  The  price  of  the 
bonds  is  thus  forced  up  beyond  the  chance  of  the  average 
return  on  the  capital  employed.  After  the  banker  has 
bought  his  bonds  and  taken  out  his  circulation  there  is 
no  certainty  that  he  will  keep  it.  He  must  still  watch 
the  bond  market.  He  must  avoid  a  loss  on  the  bonds, 
and  he  will  make  a  profit  on  them  if  he  can.  He  is  a 
trustee  for  his  shareholders  and  he  must  do  what  their 
interests  require.  If  the  chance  to  avoid  a  loss,  or  to 
make  a  profit,  presents  itself,  he  must  seize  it,  regardless 
of  the  effect  upon  the  circulating  medium  in  general. 
Thus  the  issue  of  notes  is  not  the  chief  concern  of  the 
bank.  It  is  secondary  to  something  else,  and  this  is  the 
reason  why  a  bond-secured  currency  never  can  be  an  elastic 
currency.  It  is  responsive  not  to  the  wants  of  trade  but 
to  the  price  of  bonds. 

The  Aldrich  Bill  of  the  last  Congress  proposed  to  au- 
thorize the  acceptance  of  State,  municipal,  and  railroad 
bonds  as  security  for  deposits  of  the  Government's  money 
in  national  banks.  This  was  perhaps  a  first  step  toward 
the  acceptance  of  the  same  kind  of  bonds  as  security  for 
circulating  notes. 

Such  circulation  would  be  as  rigid  and  hidebound  as 
the  present.  There  would  be  an  active  speculation  in  the 
classes  of  bonds  accepted,  and  the  market  price  would  be 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    255 

carried  up  to  figures  approaching  those  of  governments. 
Then  the  volume  of  currency  would  be  controlled  not  by 
the  wants  of  trade  but  by  the  bond  market,  as  it  is  now. 
The  Aldrich  Bill  deals  with  the  bank-note  question  in  still 
another  way.  It  allows  the  Secretary  of  the  Treasury  to 
suspend  and  resume  the  redemption  of  national  bank 
notes  at  Washington  at  his  own  pleasure.  Under  exist- 
ing law  a  redemption  fund  equal  to  five  per  cent,  of  its 
outstanding  circulation  must  be  kept  in  the  Treasury  by 
each  note-issuing  bank.  Anybody  may  send  bank-notes 
in  bulk  to  the  Treasurer  of  the  United  States  for  redemp- 
tion, and  they  must  there  be  sorted,  redeemed  out  of  the 
five  per  cent,  fund,  and  returned  to  the  parent  banks. 
The  cost  of  sorting  and  transporting  must  be  defrayed  by 
the  banks  issuing  the  notes,  and  each  one  must  keep  its 
five  per  cent,  fund  replenished.  The  Aldrich  BiU  does  not 
propose  to  stop  redemption  of  the  notes  by  the  Govern- 
ment, but  it  provides  that  the  Secretary  of  the  Treasury, 
after  redeeming  them,  may  pay  them  out  for  Government 
dues  instead  of  sending  them  home.  One  of  the  chief 
defects  of  our  present  system  is  the  sluggishness  of  the 
redemption  of  national  bank-notes.  This  section  of  the 
biU  proposes  to  make  it  still  more  sluggish,  but  that  is  its 
least  objectionable  feature,  since  it  would  give  the  Secre- 
tary control  of  the  reserve  fund  of  every  note-issuing  bank 
in  the  Union,  and  enable  him  to  "put  the  screws  on"  and 
take  them  off  at  his  own  wiU.  Their  redemption  fund  in 
Washington  is  a  part  of  their  cash  reserve.  Ordinarily 
one  quarter  of  their  circulation  will  be  sent  to  Washington 
for  redemption  each  year.  If  the  Secretary  can  say  to  the 
banks:  "Until  I  give  the  word  you  need  not  redeem 
any  of  your  note  issues  except  such  as  are  presented  at 
your  counters,"  his  powers,  both  financial  and  political, 
will  be  much  greater  than  they  are  now,  or  ever  ought  to 
be. 

This  feature  of  the  Aldrich  Bill  would  be  one  step  toward 
making  the  Treasury  itself  a  bank  of  banks.  Such  a  plan, 
if  contemplated,  should  not  be  condemned  unheard,  but 


2S6  HISTORY  OF  THE  SAVINGS  BANKS 

the  question  raised  by  it  could  not  be  decided  on  financial, 
grounds  alone.  It  would  carry  the  flavor  of  socialism — 
at  all  events  the  socialist  would  consider  it  an  endorse- 
ment of  their  claim  that  the  State  should  control  the  means 
of  production.  For  the  present  I  think  that  the  better 
opinion  of  the  country  favors  the  retirement  of  the  Govern- 
ment from  the  banking  business  altogether,  rather  than 
the  assumption  of  new  responsibilities  of  that  kind. 

At  best  the  Aldrich  Bill  is  only  a  transitory  measure, 
based  upon  a  Treasury  surplus  which,  in  any  sound  system 
of  national  finance,  is  a  temporary  affair.  Theoretically, 
the  surplus  ought  not  to  exist  at  all,  but  since  it  is  not 
possible  to  establish  beforehand  an  exact  balance  between 
receipts  and  expenditures,  any  accidental  surplus  should 
be  applied  promptly  to  the  extinction  of  the  national 
debt.  Heaping  up  a  surplus  designedly  to  be  deposited 
in  banks,  with  or  without  interest,  with  or  without  special 
security,  is  an  anomaly  for  which  no  defence  can  be  found, 
and  none  has  ever  been  attempted,  so  far  as  I  know.  We 
have  seen  that  the  credit  of  the  national  banks  takes  the 
two  distinct  forms  of  deposits  and  circulating  notes,  the 
deposit  liabilities  being  many  times  greater  than  the  note 
liabilities.  The  deposit  liabihties  are  allowed  to  rise  and 
fall  in  volume  without  limit,  except  that  each  bank  must 
keep  a  certain  percentage  of  cash  reserve.  The  note  li- 
abilities are  restricted  in  two  ways:  No  bank  can  issue 
notes  exceeding  the  amount  of  its  capital,  or  exceeding  the 
par  value  of  the  Government  bonds  deposited  in  the 
Treasury  as  security  therefor.  These  differences  in  legal 
requirements  and  restrictions  indicate  that  the  framers 
of  the  law  supposed  that  there  was  an  essential  difference 
between  a  deposit  liability  and  a  note  liability,  calling 
forgreater  caution  in  the  one  case  than  in  the  other.  They 
must  have  thought  either  that  banks  are  more  likely  to 
extend  their  credit  unwisely  in  the  form  of  notes  than  in 
the  form  of  deposits,  or  that  the  notes  when  once  issued 
are  likely  to  come  in  for  redemption  more  suddenly  than 
the  checks  of  depositors  come  in  for  payment.     Both 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    257 

of  these  conceptions  are  erroneous  and  the  fears  based 
upon  them  are  groundless. 

The  essence  of  good  banking  consists  in  maintaining  a 
quantity  of  cash  which  shall  be  ample  to  meet  all  the 
demands  that  are  presented  by  the  bank's  creditors, 
whether  depositors  or  note-holders.  The  national  bank- 
ing law  fixes  the  amount  of  cash  reserve  against  deposits 
at  twenty-five  per  cent,  in  large  cities  and  fifteen  per  cent, 
in  other  places;  allowing  the  banks  in  these  smaller  places 
to  keep  three  fifths  of  their  reserve  in  banks  in  the  large 
cities.  It  is  worth  mention  here  that  under  the  Suffolk 
Bank  system  before  the  Civil  War  the  law  of  Massachu- 
setts allowed  the  country  banks  to  keep  their  entire  reserve 
in  the  city  banks  and  that  no  harm  ever  resulted  from 
that  law.  The  country  banks  had  practical  freedom  of 
note  issue.  They  found  that  very  little  specie  was  called 
for  by  their  customers  and  that  as  much  was  brought  in 
as  was  taken  out  each  day.  Redemption  of  the  circula- 
tion of  each  New  England  bank  took  place  in  Boston. 

Their  notes  offset  each  other  at  the  Suffolk  Bank  just  as 
the  checks  of  our  clearing-house  banks  offset  each  other 
now,  and  only  the  balances  were  paid  in  cash.  The  New 
England  banks  paid  out  their  o\vn  notes  to  their  custom- 
ers except  in  cases  where  specie  was  expressly  called  for, 
but  such  cases  hardly  ever  happened. 

A  bank-note  is  a  potential  demand  upon  the  cash  re- 
serve of  the  issuing  bank,  and  is  of  the  same  nature  as  a 
check  drawn  by  a  depositor.  Both  are  pieces  of  paper 
circulating  in  the  community  on  the  strength  of  the  bank's 
credit,  and  the  question  that  concerns  us  now  is  whether 
the  bank  is  likely  to  issue  its  credit  more  profusely  and 
recklessly  in  the  form  of  notes  than  in  the  form  of  deposits. 
Also  whether  the  notes,  when  once  issued,  are  more  likely 
to  come  in  for  redemption  suddenly  and  unexpectedly 
and  thus  to  cause  trouble  to  the  bank  and  to  the  com- 
munity. 

To  answer  these  questions  we  must  observe  how  bank- 
notes and  bank  checks  take  their  rise.     Usually  they 


258  HISTORY  OF  THE  SAVINGS  BANKS 

originate  in  the  discount  of  commercial  paper.  Mr.  A 
offers  such  paper  to  his  banker  payable  in  sixty  or  ninety 
days.  The  banker  enters  the  amount  of  the  bill,  less  the 
interest,  in  A's  pass-book  as  a  deposit.  Then  it  is  op- 
tional for  A  to  draw  checks  against  this  sum  to  the  order 
of  B,  C,  and  D,  or  to  draw  a  check  to  his  own  order  and 
present  it  to  the  paying  teller  and  ask  for  money.  As  I 
have  said  in  another  place:  * 

"Suppose  that  the  bank  has  the  right  to  issue  circulat- 
ingnotes,  and  that  the  customer,  whose  paper  has  been  dis- 
counted, desires  to  use  the  proceeds  in  paying  the  wages 
of  farm  hands,  or  factory  operatives,  or  in  buying  coun- 
try produce,  or  in  other  ways  and  in  places  where  checks 
are  not  acceptable.  He  will  ask  for  bank-notes,  in  order 
to  pay  them  to  the  wage-earners,  farmers,  etc.  He  might 
ask  for  gold,  in  which  case  the  bank  would  be  obliged  to 
give  it  to  him,  but  the  notes  are  more  convenient  and  will 
be  generally  preferred  by  the  payees.  The  payees  may 
demand  gold  from  the  bank-notes  if  they  choose,  but  gen- 
erally they  will  not  do  so.  They  will  pay  them  to  the 
storekeepers  or  to  others  to  whom  they  are  indebted,  and 
the  latter  will  deposit  them  in  the  issuing  bank  to  their 
own  credit,  or  in  other  banls:s  which  will  send  them  to  the 
issuing  bank  for  redemption.  Eventually  they  will  be 
paid  out  of  the  bank's  cash  reserve.  They  will  be  paid 
out  of  the  same  fund  from  which  the  customer's  checks 
would  have  been  paid,  if  he  had  drawn  the  money  by 
means  of  check  payable  to  order,  instead  of  taking  notes 
payable  to  bearer. 

"The  banker  cannot  decide  whether  the  credit  he  has 
extended  to  his  customers  shall  be  used  in  the  form  of 
checks  or  in  the  form  of  notes.  His  liabilities  are  the 
same  in  either  case.  The  only  thing  that  need  concern 
him  is  the  goodness  of  the  paper  which  he  bought  when 
he  issued  his  credit  to  his  customer.  The  form  of  issue, 
whether  in  checks  that  may  pass  through  one  or  two 
hands,  or  in  circulating  notes  that  may  pass  through  many, 

*"Money  and  Banking,"  p.  222. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    259 

is  of  little  consequence;  and  even  if  it  were  of  much  con- 
sequence, it  is  beyond  control.  It  is  also  beyond  the 
control  of  the  depositor.  He  will  call  for  notes  only  in 
cases  where  he  cannot  use  checks.  The  controlling  force 
here  is  the  public  demand,  to  which  both  the  banker  and 
his  customers  conform.  The  pubhc  demand  determines 
also  how  long  the  notes  shall  stay  out  after  they  have 
been  issued.  Nobody  keeps  more  notes  on  hand  than  he 
needs.  When  a  man  finds  that  he  has  a  surplus,  he  re- 
turns it  to  the  bank.  Thus  the  overflow  and  inflow  of 
bank-notes  is  automatic. 

"While  it  is  immaterial  to  the  banker  whether  the 
credit  which  he  issues  shaU  take  the  form  of  checks  or 
notes,  it  is  important  both  to  him  and  to  the  community 
that  it  shall  take  one  form  or  the  other,  since  the  alter- 
native is  the  withdrawal  of  gold  for  purposes  of  circulation 
and  the  consequent  lessening  of  his  cash  reserve ;  and  the 
lessening  of  his  reserve  by  $1  usually  lessens  his  abihty 
to  discount  commercial  paper  by  $4  or  more.  If  it  is 
for  the  interest  of  the  community  that  the  system  of 
bank  credits  should  exist  at  aU,  it  should  be  available  in 
the  form  of  circulating  notes,  as  weU  as  of  checks;  for 
banking  science  consists  in  the  substitution  of  less  costly 
instruments  of  exchange  for  more  costly  ones,  according 
to  the  demands  of  trade.  The  bank-note,  since  it  is  one 
of  the  less  costly  ones  and  is  indispensable  in  the  modern 
world,  should  be  readily  available  as  needed.  Its  utility 
is  greatest  in  sparsely  settled  communities,  where  there 
are  few  or  no  banks." 

Now  is  it  not  obvious,  is  it  not  in  accord  with  all  experi- 
ence, that  the  notes  circulating  among  wage-earners, 
farmers,  market  gardeners,  and  such  people  will  stay  out 
longer  than  checks  which  usually  pass  through  only  two 
hands — that  of  the  payee  and  of  the  payee's  banker? 
Under  the  Suffolk  Bank  system,  where  the  most  speedy 
and  perfect  method  of  bank-note  redemption  existed  that 
this  country  has  ever  known,  the  average  circulation 
period  of  New  England  bank-notes  was  five  weeks.     The 


26o  HISTORY  OF  THE  SAVINGS  BANKS 

law  of  Massachusetts,  by  providing  that  no  bank  should 
pay  out  any  notes  but  its  own,  forced  every  bank  to  clear 
its  tills  of  the  notes  of  other  banks  as  fast  as  they  came  in, 
and  send  them  to  the  Suffolk  Bank  for  redemption.  Yet, 
even  under  this  pressure,  every  bank-note  that  was  issued 
remained  out  as  much  as  five  weeks  on  the  average, 
whereas  checks  usually  stay  out  not  more  than  two  days. 

But  suppose  that  there  is  a  panic  and  a  financial  crisis, 
which  class  of  liabilities  would  be  presented  for  payment 
in  greatest  quantity?  Is  it  not  true  that  in  every  crisis 
the  demand  for  currency,  whether  it  be  bank-notes  or 
greenbacks,  or  what  not,  is  intense?  Instead  of  collecting 
notes  to  send  in  to  banks  for  redemption  there  is  a  rush 
of  the  bank's  customers  to  draw  them  out,  and  the  notes 
generally  sell  at  a  premium  in  brokers'  offices.  Of  course 
this  is  on  supposition  that  the  notes  are  good,  and  that 
the  issuing  banks  have  the  wherewithal  to  redeem  them. 
What  we  are  trying  to  find  out  now  is  whether  note 
liabilities  are  more  dangerous  to  banks  than  deposit  liabil- 
ities, supposing  the  banks  themselves  to  be  sound  and  sol- 
vent. Is  it  not  plain  that  the  note  liabilities  are  the  less 
hazardous,  the  less  explosive  of  the  two? 

Now  we  have  seen  that  there  is  no  limit  in  this  country 
to  the  extension  of  bank  credit  in  the  form  of  deposit 
Habilities,  except  the  keeping  of  a  certain  percentage 
of  cash  reserve.  Call  it  inflation,  or  what  you  will,  the 
amount  of  bank  liabilities  actually  existing  in  this  form, 
counting  national  and  State  banks  together,  is  sixteen 
times  as  great  as  that  of  all  the  bank-note  liabilities  now 
existing.  Yet  I  have  heard  the  opinion  advanced  that  if 
we  should  adopt  a  system  of  what  is  called  assets  currency 
in  this  country  our  credit  abroad  would  be  ipso  facto  de- 
stroyed. I  have  never  heard  any  argument  advanced  to 
support  that  hypothesis,  but  merely  the  expression  of  a 
belief  that  such  would  be  the  result.  I  am  obliged,  for  a 
variety  of  reasons,  to  differ  from  those  who  hold  that 
opinion.  One  such  reason  is  that  in  all  the  countries  of 
Europe,  with  one  exception,  the  system  of  assets  currency 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    261 

prevails;  that  is,  the  banks  are  allowed  to  issue  circulating 
notes  based  upon  miscellaneous  assets  in  their  own  cus- 
tody. The  single  exception  to  this  rule  is  that  part  of 
Great  Britain  called  England.  Assets  currency  prevails 
in  Scotland,  Ireland,  and  Canada,  but  not  in  England 
proper.  It  prevails  on  the  continent  of  Europe  generally, 
but  the  tendency  is  to  concentrate  the  issue  of  bank-notes 
in  a  single  institution  in  each  country. 

The  question  arises  whether  the  existence  of  separate 
banks  with  a  capital  as  small  as  $25,000  each  does  not 
make  unsecured  note  issues  specially  hazardous  in  this 
country.  Under  the  terms  of  the  Fowler  Bill  each  such 
bank  would  have  the  right  to  issue  such  notes  to  the 
amount  of  twenty-five  per  cent,  of  its  capital;  that  is, 
$6,250.  Every  such  bank  has  the  legal  right  to  discount 
the  notes  of  its  customers  to  any  extent  it  pleases,  provided 
it  keeps  fifteen  per  cent,  of  cash  on  hand  as  a  reserve.  So 
the  question  is  whether  the  bank  is  endangered  by  allow- 
ing customers  to  take  the  bank's  notes  for  circulation  to 
the  aggregate  amount  of  $6,250  instead  of  drawing  that 
sum  from  its  cash  reserve,  as  they  would  otherwise  do. 
Evidently  the  bank  would  be  strengthened  rather  than 
weakened  as  long  as  the  notes  were  out.  The  liability 
of  the  smaU  bank  to  become  insolvent  on  this  score  would 
be  neither  greater  nor  less  than  that  of  a  large  one.  More- 
over, the  statistics  of  the  Comptroller's  office  do  not  show 
a  greater  tendency  to  failure  among  small  banks  than 
among  large  ones.  The  large  banks  are  generally  con- 
ducted on  Hberal  and  broad-gauge  principles.  The  small 
ones  are  usually  in  the  charge  of  skinflints,  and  the  skin- 
flint policy,  whatever  else  may  be  said  of  it,  is  the  one 
most  conducive  to  solvency.  Insolvency  is  the  severest 
punishment  that  can  be  inflicted  on  a  bank.  No  bank 
with  a  bona  fide  capital  desires  to  faU,  and  no  bank  can 
exist  under  our  national  system  without  a  bona  fide  capi- 
tal. A  multiplicity  of  banks  requires  a  corresponding 
increase  in  the  force  of  bank  examiners,  but,  on  the  other 
hand,  a  small  bank  is  more  easily  examined,  and  the  re- 


262  HISTORY  OF  THE  SAVINGS  BANKS 

suits  are  less  liable  to  error  than  in  the  case  of  a  large  one. 
For  these  reasons  I  do  not  consider  the  existence  of  small 
banks  a  specially  hazardous  element  in  the  problem  of 
assets  currency,  although  at  first  it  seems  such. 

Another  reason  for  my  belief  that  a  system  of  assets 
currency  would  not  injure  our  credit  abroad  is  that  foreign 
bankers  and  financiers  know  that  our  whole  monetary 
system,  including  the  part  for  which  the  Government  is 
responsible,  rests  at  last  upon  the  assets  of  the  banks. 
Neither  the  national  Government  nor  the  State  and 
municipal  governments  could  exist  if  those  assets  were  not 
good.  What  would  bonds  be  worth  in  such  case?  The 
assets  of  the  banks  consist  of  valid  liens  on  the  circulating 
property  of  the  country,  or  valid  claims  against  the  own- 
ers of  the  same.  If  the  property  exists,  the  assets  of 
the  bank  are  good.  If  it  does  not  exist.  Government  bonds 
would  be  worthless,  the  greenbacks  could  not  be  redeemed, 
and  the  Government  could  not  pay  its  running  expenses 
three  months. 

Bank-notes  secured  by  the  assets  of  all  the  banks  would 
therefore  be  safer  than  those  secured  by  Government 
bonds.  Very  few  banks,  however,  would  consent  to  be- 
come liable  for  the  debts  of  other  banks  over  whose 
management  they  could  have  no  control.  On  the  other 
hand,  very  few  banks  fail — only  seven  per  cent,  of  the 
whole  number,  ninety- three  per  cent,  remain  always  sound 
and  solvent.  It  is  easy  to  compute  the  possible  loss  from 
bank  failures  and  to  provide  an  insurance  or  safety  fund 
sufficient  to  cover  it.  It  has  been  shown  repeatedly  that  a 
very  small  tax  on  bank  circulation — about  one  fifth  of 
one  per  cent,  per  annum — ^would  have  sufficed  to  protect 
note-holders  against  loss  under  our  national  bank  system 
without  any  bond  security  whatever.  It  is  hardly  worth 
while  to  go  into  these  details  again.  They  have  been 
dished  up  many  times  during  the  past  ten  years,  and  I 
have  found  that  almost  every  man  who  takes  the  trouble 
to  study  the  subject  for  himself,  by  the  light  of  our  own 
experience  and  that  of  other  countries,  comes  to  the  con- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    263 

elusion  that  the  safety-fund  system,  as  embodied  in  the 
amended  Fowler  Bill  or  in  the  earlier  Indianapolis  plan, 
would  supply  the  country  a  perfectly  sound  currency 
without  bond  security — one  from  which  no  note-holder 
would  ever  lose  the  smallest  fraction  of  a  dollar.  Such 
currency  would  be  elastic  and  responsive  to  the  varying 
seasons  and  the  various  demands  of  business.  It  would 
expand  when  the  crops  are  to  be  moved  and  it  would  con- 
tract after  they  are  moved,  and  both  expansion  and  con- 
traction would  be  automatic.  This  would  be  a  great  gain 
to  the  West,  but  it  would  be  equally  a  gain  to  New  York. 
When  the  West  draws  on  New  York  in  the  early  autumn 
for  currency  to  move  the  crops  every  dollar  of  legal  tender 
money  that  is  sent  out  curtails  the  lending  power  of  the 
banks  by  as  much  as  four  dollars.  It  brings  business 
"up  with  a  round  turn,"  and  sometimes  to  the  very  verge 
of  panic.  No  such  thing  ever  happens  in  Canada.  The 
Canadian  banks  are  on  the  safety-fund  system.  They 
can  issue  notes  when  there  is  a  demand  for  them,  and 
in  proportion  to  the  demand.  They  are  not  obliged  to 
pay  $1.08  for  each  $1  of  currency.  They  are  not  obliged 
to  curtail  their  loans  to  merchants  and  manufacturers 
in  order  to  supply  needed  funds  to  farmers  and  grain 
buyers. 

The  people  who  stand  in  the  way  of  this  reform  are 
those  who  never  take  the  trouble  to  study  the  question  at 
all.  Because  the  bond-security  system  is  our  system,  they 
think  that  no  other  is  possible.  A  majority  of  the  mem- 
bers of  the  Indianapolis  Monetary  Commission  were,  at 
the  outset,  opposed  to  any  departure  from  the  bond-secur- 
ity system.  They  shared  the  common  prejudice  born  of 
the  confusion  of  antebellum  days,  when  each  State  had  its 
separate  system  of  note  issue,  and  when  there  was  not 
sufficient  legal  control  upon  any.  Yet  all  the  members 
of  the  Commission  finally  agreed  that  a  bond-secured 
currency  was  opposed  to  sound  banking  principles  because 
it  eliminated  the  element  of  credit  from  the  note-issuing 
function.    They  agreed  also  that  the  bond -security  system 


264  HISTORY  OF  THE  SAVINGS  BANKS 

was  doomed  to  an  early  death  by  the  extinction  of  the 
national  debt,  and  that  something  must  be  devised  to  take 
its  place.  They  accordingly  devised  the  Indianapolis 
plan,  which  embodies  the  principle  of  an  insurance  fund, 
or  guarantee  fund,  to  be  contributed  by  all  the  partici- 
pating banks  and  sufficient  to  redeem  the  notes  of  the  very 
few  banks  that  would  become  insolvent.  This  principle 
was  adopted  also  in  the  Fowler  Bill.  The  only  novelty 
in  the  latter  bill,  distinguishing  it  from  other  measures  for 
issuing  assets,  currency,  is  the  one  relating  to  the  redemp- 
tion of  bank-notes.  It  provides  that  all  notes  shall  be 
redeemed  in  gold  at  their  own  counters,  and  also  at  a  re- 
demption city,  of  which  there  are  three  named  in  the  bill: 
New  York,  Chicago,  and  San  Francisco.  The  present  law 
requires  redemption  of  notes  at  the  counter  of  the  issuing 
bank  and  also  at  Washington  City,  where  each  must  keep 
a  deposit  equal  to  five  per  cent,  of  its  circulation.  Wash- 
ington City  is  not  a  commercial  centre,  and  there  is  no 
reason  why  it  should  be  chosen  for  this  purpose  except 
that  it  is  the  locality  where  defaced  and  mutilated  notes 
are  replaced  with  new  ones.  This  cannot  be  considered 
a  good  reason  for  sending  to  a  non-commercial  and  rather 
out-of-the-way  place  all  notes  that  stray  away  from 
home. 

Frequent  redemption  of  notes  is  called  for  by  other 
reasons  than  the  convenience  of  the  note-holder.  It  com- 
pels the  banker  to  hold  an  adequate  cash  reserve  and  to 
keep  his  assets  generally  in  a  liquid  condition.  It  tends  to 
prevent  him  from  putting  his  funds  into  long  loans  or 
locldng  them  up  in  speculative  securities.  It  is  a  notable 
incentive  to  sound  banking.  The  law  ought,  therefore, 
to  favor  a  system  which  looks  to  frequent  redemption, 
and  provides  facilities  therefor.  Banking  science  at  the 
present  day  tends  strongly  in  that  direction.  In  Canada 
note-issuing  banks  are  required  to  have  a  redemption 
agency  in  the  chief  city  of  each  of  the  seven  provinces  of 
the  Dominion,  and  at  such  other  places  as  the  Treasury 
Board  may  determine.     In  Germany  each  bank  is  re- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    265 

quired  to  redeem  its  notes  at  Berlin  or  Frankfort,  as  well 
as  at  its  own  counter. 

Redemption  of  bank-notes  under  our  system,  however, 
is  a  question  which  affects  the  banks  themselves  rather 
than  the  public.  Each  bank  receives  the  notes  of  every 
other  bank  at  par  in  payments  to  itself,  and  also  receives 
them  at  par  as  deposits.  Converting  the  notes  into  par 
funds  for  their  customers  is  equivalent  to  redeeming  them 
in  gold.  Therefore,  the  question  of  cash  redemption  of 
national  bank-notes  is  one  which  concerns  only  the  banks 
themselves.  It  is  a  practical  question  which  they  ought 
to  be  allowed  to  settle  among  themselves. 

On  the  4th  of  December  last  a  Committee  of  the  New 
York  Chamber  of  Commerce  made  a  report  endorsing  the 
general  plan  of  assets  currency  as  supplementary  to  the 
existing  circulation,  but  did  not  recommend  any  particular 
bill  for  carrying  this  plan  into  effect.  The  Chairman  of 
the  Committee  making  this  report  was  the  ex -President 
of  this  Association  of  Savings  Banks,  Mr.  J.  Harsen 
Rhoades,  and  among  the  signers  of  it  were  two  ex-Secre- 
taries of  the  Treasury  of  the  highest  rank.  Whether  a 
bond-secured  circulation  would  go  well  with  another 
variety  of  notes  issued  by  the  same  banks,  I  shall  not  con- 
sider. It  is  sufficient  for  this  occasion  to  aUude  to  the  fact 
that  the  principle  of  assets  currency  has  received  the  en- 
dorsement of  the  high  authorities  named,  and  that  their 
report  was  approved  by  the  Chamber  of  Commerce  after 
a  debate,  and  by  a  nearly  unanimous  vote,  therefore  the 
friends  and  advocates  of  the  system  may  feel  amply  en- 
couraged to  continue  their  efforts  to  bring  about  this 
great  reform. 

INFLUENCE  OF  THE  SAVINGS  BANK  IN  THE  COMMUNITY 

Mr.  John  R.  Van  Wormer,  Secretary  of  the  Lincoln 
Safe  Deposit  Company,  spoke  on  the  above  subject  in 
part,  as  foUows: 

The  growth  of  Savings  Banks  in  the  United  States  since 


266  HISTORY  OF  THE  SAVINGS  BANKS 

1816  has  been  phenomenal.  Their  vast  deposits  to-day 
reflect  in  large  part  the  general  prosperity  and  the  steady 
improvement  of  the  temporal  condition  of  the  thrifty 
masses  of  our  people.  It  taxes  one's  imagination  even 
to  comprehend  the  magnitude  of  the  Savings  Banks 
deposits  of  the  State  of  New  York,  on  the  ist  of  last 
January,  when  they  are  stated  in  figures  so  large  as  one 
thousand  and  seventy-seven  millions  of  dollars.  And  one 
is  compelled  to  pay  the  tribute  of  astonishment  when  he 
observes  that  the  increase  in  deposits  in  1902  was  over 
twenty-nine  millions  of  dollars ;  and  the  amount  credited  or 
paid  out  in  interest  over  thirty-three  millions.  Equally 
one's  admiration  is  challenged  when  he  notes  the  fact  that 
it  has  cost  to  carry  on  the  immense  business  of  the  Savings 
Banks  of  the  State  only  $2.86  per  one  thousand  dollars 
of  resources.  Think  of  what  it  means  that  out  of  a 
population  of  some  eight  millions,  over  two  millions, 
two  hundred  and  seventy-five  thousand  accounts  should 
stand  upon  the  books  of  these  institutions  for  savings, 
when,  great  as  they  are,  they  are  but  one  of  the  various 
depositories  of  those  who  accumulate.  We  should  never 
forget  that  the  theory  of  the  State  which  created  the 
Savings  Bank  system  was  that  its  primary  purpose  was  the 
estabhshment  of  absolutely  safe  depositories  for  the 
savings  of  the  poor  or  of  those  of  modest  means,  and 
that  these  depositories  should  be  hedged  about  with  every 
safeguard  which  could  be  devised.  But  the  most  perfect 
system  ever  framed  in  the  statute  of  the  lawmaker  would 
result  in  disappointment  were  it  not  possible  to  find  men 
of  ability,  probity,  and  business  training  to  organize  the 
institutions  contemplated  and  to  conduct  the  arduous 
and  complicated  affairs  attendant  thereupon.  Yet  there 
is  a  broader  influence  and  a  more  significant  duty  which 
may  be  associated  with  the  administration  of  the  affairs 
directly  within  your  province.  Your  personal  contact 
with  the  masses  of  our  people  is  intimate;  you  are  called 
upon  to  study  their  condition,  be  it  good,  bad,  or  indiffer- 
ent.    Often  the  poor  and  uninformed  seek  your  advice 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    267 

and  profit  by  it.  Your  opportunities  for  good  are  nu- 
merous in  dealing  with  the  young  man  who  has  just  begun 
to  save  and  who  is  about  to  undertake  the  grave  respon- 
sibilities of  citizenship.  Intimacy  with  these  conditions 
may  sometimes  dull  the  Savings  Bank  official's  appreci- 
ation of  the  high  estimate  which  the  humble  depositor 
places  upon  his  wisdom  and  influence.  Of  necessity  many 
of  you  must  be  familiar  with  tenement  house  conditions, 
and  hence  cannot  fail  to  appreciate  the  importance  of  all 
that  philanthropy  has  devised  for  the  improvement  of 
those  who  are  the  victims  of  unfavorable  environment. 
In  the  process  of  investing  the  savings  of  the  people  you 
cultivate  intimate  familiarity  with  the  building  laws  and 
with  the  way  they  are  executed.  You  fully  understand 
the  quahty  and  efficiency,  or  the  opposite,  of  police  ad- 
ministration, and  the  fidelity,  or  otherwise,  with  which 
the  duties  of  the  officials  of  the  department  of  health  are 
discharged.  You  know  a  great  deal  about  the  condition 
of  the  pubhc  schools,  the  status  of  the  buildings  devoted 
to  such  purposes,  the  results  obtained,  and  the  good  or 
bad  order  which  prevails  among  the  children  of  the  con- 
gested quarters.  It  is  in  your  power  to  e*xert  a  powerful 
influence  for  good  in  support  of  the  State  and  municipality 
in  their  efforts  to  equip  the  children  of  the  poor,  and  even 
the  waifs  of  the  streets,  with  a  practical  education,  so 
practical  and  thorough  that  the  recipient  shaU  be  enabled 
to  earn  a  respectable  and  adequate  livelihood  in  the  com- 
munity in  which  he  or  she  lives.  No  set  of  men  In  the 
cities  of  the  State  know  better  than  you  do  what  con- 
stitutes the  elements  of  disorder  and  crime,  or  from  what 
sources  emanate  the  malign  influences  which  taint  and 
demoralize  the  unprotected  youth  of  both  sexes.  It 
is  not  enough  that  the  child  shall  have  a  modicum  of 
education  along  conventional  lines;  something  else 
must  be  embraced  in  the  course  of  instruction;  the  pur- 
pose of  the  method  of  education  should  be  practical; 
one  of  its  objects  should  be  that  of  manual  training, 
which  shall  help  the  teaching  of  the  rudiments  of  a  use- 


.268  HISTORY  OF  THE  SAVINGS  BANKS 

ful  trade  or  calling  toward  the  future  independence  of 
the  recipient,  and  the  attainment  of  a  respectable  posi- 
tion in  society. 

You  are  familiar  with  the  vexatious  recurrence  of 
strikes,  boycotts,  and  other  labor  troubles.  What  is  to  be 
done  to  avert  or  to  mitigate  their  hateful  consequences  in 
the  loss  of  wages  to  the  workman,  the  temptation  which 
besets  the  unemployed,  the  disturbance  of  business,  the 
enhanced  cost  of  building  and  living?  All  sane  men  grieve 
because  of  the  tyranny,  lack  of  intelligence,  and  absence 
of  responsibility  which  characterize  the  walking  delegate, 
or  business  agent  of  the  trades  union,  and  you  are  appalled 
at  the  flippant  readiness  with  which  a  labor  union  repudi- 
ates a  contract,  thus  displaying  scornful  disregard  for, 
or  lack  of  appreciation  of,  the  essential  principles  which 
underlie  society.  You  are  abashed  in  the  presence  of  a 
willingness,  indeed  of  a  positive  effort,  on  the  part  of  the 
"labor  politician,"  the  demagogue,  and  the  social  agitator, 
to  create  an  antagonism  of  classes.  Recognizing  all  this, 
it  is  still  true  that  there  is  a  middle  ground  of  mutually 
beneficent  and  honorable  understanding  and  adjustment 
for  those  who  are  honestly  and  vitally  interested.  By 
this  I  mean  the  employer  and  the  employed.  I  am  sure 
every  sane  man  believes  that  an  understanding  cannot 
be  reached  without  reasonable  concessions  from  both  sides. 
Do  not  get  angry  and  beget  anger  in  the  other  fellow, 
thus  rendering  the  first  approach  to  an  understanding 
difficult.  Radicals  do  not  harmonize  conflicting  inter- 
ests; temperate,  level-headed  persons,  who  can  see  both 
sides  of  a  question,  do.  I  think  it  is  pretty  generally 
conceded  that  a  broader  view  of  the  respective  and  re- 
lated interests  of  capital  and  labor  must  eventuaUy  pre- 
vail; that  organized  labor  must  accept  a  position  entailing 
full  responsibility  for  contracts  entered  into  and  agree- 
ments made  by  its  representatives;  and  that  this  can 
only  be  accomplished  through  incorporation  and  sub- 
mission to  those  processes  of  law  which  enforce  contracts ; 
that  the  agitator  and  anarchist  shall  be  eliminated  in  all 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    269 

the  relations  between  the  employer  and  employed;  that 
the  right  to  emplo3mient  and  the  privilege  to  earn  an 
honest  living  shall  be  conceded  by  all  to  a  man  or  woman, 
whether  union  or  non-union  in  affiliation;  that  some  of 
the  intolerable  dogmas  of  the  walking  delegate  shall  be 
abrogated  and  properly  stigmatized  by  organized  labor 
itself,  lest  the  result  be  anarchy  and  revolution;  that  the 
employer  shall  be  required  to  recognize  and  manifest  the 
highest  sense  of  responsibility  in  the  administration  of 
his  trust;  that  he  shall  entertain  suggestion  and  not  repel 
reasonable  efforts  toward  the  remedy  of  evils  or  the  ad- 
justment of  disagreements;  that  he  shall  recognize  the 
sacredness  of  the  trusteeship  which  he  holds.  That  all 
these  imperfectly  expressed  things,  and  more,  wiU  be  satis- 
factorily done,  I  profoundly  believe,  but  the  proceedings 
will  be  wonderfully  expedited  through  the  cultivation  of 
mutual  confidence. 

The  President :  It  is,  after  all,  the  quiet  influence  of  the 
Savings  Banks  on  the  community  which  teUs.  Many  of 
the  young  men  who  come  before  you  can  doubtless  detail 
an  experience  similar  to  that  which  your  President,  as  a 
young  man,  had.  He  had  an  opportunity  to  save  a  little 
money;  he  called  at  a  Brooklyn  Savings  Bank  and  in- 
vested it  there.  He  gathered  a  little  fund,  and  after- 
ward went  to  the  bank  to  draw  it  out  to  enter  in  business 
in  a  small  way.  The  bank  official  asked:  "Why  do  you 
want  to  draw  out  your  money?"  He  told  him  that  he 
was  about  to  enter  into  business.  The  bank  officer  said: 
"You  may  draw  within  five  dollars,  but  leave  the  five 
dollars,  and  some  day  you  will  want  to  add  more  to  it," 
Your  President  was  quite  struck  with  the  idea,  the  money 
was  left,  in  a  comparatively  short  time  that  deposit  was 
renewed.  It  was  the  nucleus  or  the  foundation  of  his 
career.  Now  it  is  that  silent  influence  which  you  gentle- 
men can  exert  upon  young  men  who  come  before  you  and 
who  are  within  your  reach.  I  know  that  influence  is 
stronger  than  many  people  imagine,  and  I  trust  that  the 
Savings  Banks  Association  and  the  gentlemen  connected 


2  70  HISTORY  OF  THE  SAVINGS  BANKS 

with  it  will  do  their  utmost  to  encourage  thrift  among  the 
young  men. 

HEARING  ON   MORTGAGE   TAX  BILL 

A  hearing  was  had  before  the  Joint  Senate  and  Assem- 
bly Committee  on  the  mortgage  tax  bill  held  at  the  State 
Capitol,  March,  31,  1903.  Fifty-five  members  of  the 
Savings  Banks  Association  of  the  State  were  represented. 
Mr.  Robert  C.  Morris  addressed  the  Committee  as  follows: 

Public  sentiment  in  Greater  New  York  condemns  mort- 
gage taxation.  The  opposition  has  been  often  and  ear- 
nestly expressed  by  the  press  and  by  commercial,  labor, 
and  real  estate  organizations. 

It  should  not  be  supposed  for  a  moment  that  the  ques- 
tions involved  are  not  familiar  ones.  Possibly  no  ques- 
tion of  State,  as  distinguished  from  national  taxation,  has 
been  more  constantly  or  fuUy  discussed  for  a  long  period. 
The  sentiment  against  mortgage  taxation  must  be  con- 
sidered intelligently  and  firmly  held. 

It  is  based  on  experience  of  the  present  system  in  the 
State  and  on  knowledge  of  various  forms  of  mortgage 
taxation  essayed  in  other  States,  as  well  as  upon  the  ex- 
perience elsewhere  of  the  plan  of  exempting  mortgages 
from  taxation.  The  Chamber  of  Commerce  of  the  City 
of  New  York,  as  long  ago  as  1870,  urged  the  injustice  of 
taxation  of  mortgages,  and  during  the  whole  period  since 
has  continuously  and  consistently  held  to  this  view. 

The  opposition  of  real  estate  interests  has  been  so  fre- 
quently voiced  that  it  is  not  necessary  to  quote  anything 
in  evidence.  The  Board  of  Real  Estate  Brokers,  the 
Real  Estate  Exchange  of  Brooklyn,  and  the  Real  Estate 
Owners'  Association  have  within  a  few  days  given  strong 
proof  of  this  attitude. 

The  views  of  our  commercial,  labor,  and  city  real  estate 
owning  classes  are  shared  by  the  better-informed  people 
in  the  rural  districts,  but  many  of  our  fellow-citizens  in 


SAMUEL  D.  STYLES 


TREASURER,  I0O2-O9 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    271 

those  sections  have  not  yet  learned  that  a  mortgage  tax 
falls  inevitably  upon  the  borrower,  nor  can  they  rid  them- 
selves of  the  idea  that  men  of  means  ought  to  be  taxed 
upon  the  paper  evidences  of  their  wealth,  although  the 
property  covered  by  the  paper  has  already  been  taxed. 

And  this  leads  to  the  statement  that  the  levy  of  indi- 
rect taxes  must  always  be  guarded  in  an  extreme  way  if 
injustice  is  to  be  avoided.  A  legislative  body  seldom  stops 
to  make  broad  studies  of  economic  taxation.  Money  is 
wanted,  and  is  secured  along  the  lines  of  least  resistance. 
Under  the  traditional  tax  system  of  the  State  a  higher  levy 
would  be  made,  that  would  extend  to  every  dollar  of 
property,  real  and  personal,  throughout  the  State  that 
could  be  found  and  assessed  by  the  taxing  authorities. 
Under  the  indirect  system  some  special  object  is  sought 
out  and  made  to  bear  a  special  levy.  One  day  it  is  Sav- 
ings Banks,  another  day  insurance  companies,  on  another 
day  trust  companies  are  affected,  and  on  still  another 
liquor  dealers. 

ADDRESS   BY  MR.   HENRY  L.    STIMPSON 

Mr.  Chairman  and  Gentlemen  of  the  Committee:  There 
are  so  many  waiting  here  to  take  part  in  this  that  I  will 
confine  myself  only  to  one  or  two  objections.  There  is  no 
question  but  it  must  be  admitted  that  when  this  subject 
of  the  taxation  of  mortgages  first  began  to  be  discussed 
in  the  newspapers,  and  before  the  material  points  of  the 
present  bill  became  known,  there  was  a  certain  predisposi- 
tion in  its  favor.  The  present  system  under  which  our 
mortgages  in  New  York  are  now  taxed,  when  they  are 
taxed  at  all,  and  in  which  the  burden  falls  wholly  on  the 
widow  and  the  orphans  and  the  honest  man  who  won't 
swear  off  his  taxes,  is  so  harsh  and  oppressive  that  any 
tax  which  would  apparently  levy  a  smaller  equal  tax  in 
place  of  the  present  unequal  one  would  meet,  and  it  was 
thought  then  that  this  would  meet  with  a  certain  amount 
of  predisposition  in  its  favor.  But  as  the  terms  of  this 
particular  bill  have  become  known  and  discussed,  there 


272  HISTORY  OF  THE  SAVINGS  BANKS 

has  been  such  a  storm  of  protest  aroused  in  New  York 
City  by  those  with  whom  the  members  of  the  County 
Committee  come  in  contact  that  I  think  the  County  Com- 
mittee represents  the  unanimous  sentiment  of  its  constit- 
uents in  taking  this  stand. 

The  present  bill  hits  at  two  classes  of  the  community, 
both  of  whom  form  the  backbone  of  the  conservative 
element  which  is  represented  by  the  Republican  party 
there.  First,  the  investor  in  small  real  estate  mortgages, 
and,  second,  the  investor  in  bonds  secured  by  corporate 
mortgages. 

The  objections  to  the  bill  on  behalf  of  both  these  classes 
must  be  pretty  carefully  studied,  but  there  are  so  many 
present  who  are  experts  in  the  matter  of  real  estate  mort- 
gage taxation  regarded  from  the  individual  standpoint, 
and  who  have  to  speak,  that  I  shall  say  only  one  word  on  it. 

The  bill  seems  to  have  been  drawn  with  this  point 
mainly  in  view,  namely,  the  standpoint  of  the  taxing  of  an 
individual  mortgage,  made  by  an  individual,  based  upon  a 
single  piece  of  real  estate.  On  that  basis,  the  principal 
objection  to  the  bill  seems  to  be  that  it  is  harsh  and  drastic, 
and  will  be,  unquestionably,  the  subject  of  a  great  deal  of 
annoyance  to  the  persons  who  pay  the  tax.  Instead  of 
paying  one  large  tax  as  under  the  present  system,  the 
holder  of  a  mortgage  under  the  new  bill  will  be  constantly 
subject  to  pay  small  taxes.  He  pays  a  tax  when  his 
mortgage  is  recorded;  he  pays  another  one  when  it  is 
foreclosed;  another  one  when  it  is  assigned;  another  one 
when  it  is  reduced;  and  the  machinery  for  his  payment  of 
these  small  taxes  is  so  complicated  that  the  amounts 
which  he  would  be  saved  in  the  percentage  levied  by  the 
tax  would  probably  be  much  more  than  eaten  up  in  law- 
yer's fee  to  attend  the  different  steps  that  he  would  have 
to  take  to  protect  him  under  the  bill. 

I  only  call  your  attention  to  one  particular  point,  which 
seems  to  me  in  that  respect  particularly  harsh.  Under 
this  bill,  as  I  read  it,  every  recording  officer,  the  county 
clerk  in  most  counties,  must  every  year,  in  making  out  his 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    273 

list  of  taxable  mortgages,  insert  in  it  up  to  the  maximum 
amount  every  mortgage  on  file  in  his  office.  It  may  be 
that  he  knows  perfectly  well  that  a  certain  mortgage  has 
been  partly  paid  off;  the  same  question  may  have  come 
up  the  year  before  and  the  year  before  that;  nevertheless, 
under  this  law,  he  has  got  to  put  it  in  at  the  maximum 
amount,  and  put  it  up  to  the  owner  of  the  mortgage  to 
take  all  the  trouble  afterward  to  get  it  reduced  to  the 
proper  amount. 

That  is  just  a  single  instance  of  a  certain  kind  of  the 
annoyances  and  harshness  of  the  present  measure;  but 
that  part  of  it  will  be  so  fully  discussed  by  others  that  I 
would  turn  at  once  to  what  seems  to  me  to  be  the  most 
serious  side  of  the  objections  to  the  bill.  That  is  where 
it  touches  upon  serial  bonds  secured  by  general  trust 
mortgage,  the  kind  that  is  commonly  known  as  corporate 
mortgages,  because  they  are  usually  issued  by  a  corpo- 
ration, and  in  relation  to  such  bonds  the  system  which 
this  bill  adopts  would  probably  entirely  break  down. 

In  the  first  place,  it  is  a  very  simple  thing,  compar- 
atively, to  follow  the  theory  of  the  bill  when  you  apply 
it  to  the  individual  mortgage.  If  a  man  holds  a  mort- 
gage for  five  thousand  dollars,  securing  a  bond  for  five 
thousand  dollars,  on  a  single  piece  of  real  estate,  I  think 
you  have  the  whole  thing  before  you;  and  the  theory  of 
this  tax  seems  to  be  to  levy  the  tax  on  the  bond  and  to 
compute  the  amount  of  the  tax  by  the  amount  of  the 
mortgage. 

Now  that  is  all  right  so  long  as  the  bond  and  the  mort- 
gage represent  the  same  amount,  so  long  as  they  are  in 
the  same  hands,  and  so  long  as  the  security  is  a  fixed 
piece  of  real  estate;  but  think  of  the  situation  when  you 
come  to  a  railroad  mortgage,  for  instance,  where  the  bond 
is  split  up  into  ten  thousand  bonds,  held  by  ten  thousand 
different  people,  where  the  number  of  bonds  and  the 
amount  of  the  debt  is  constantly  changing  as  bonds  are 
being  issued  or  retired,  and  where  the  amount  of  the 
security  is  not  a  single  piece  of  real  estate  but  is  a  great 


274  HISTORY  OF  THE  SAVINGS  BANKS 

railroad  system,  partly  inside  the  State  of  New  York 
and  taxable,  and  partly  outside  of  the  State  of  New  York 
not  taxable,  partly  consisting  of  real  estate  and  taxable, 
and  partly  consisting  of  personal  property  and  not  tax- 
able. Add  to  that  the  situation  where,  as  very  often 
happens,  and  usually  happens  in  most  of  those  cases,  the 
security  isn't  even  constant  or  fixed ;  the  security  is  being 
constantly  increased  with  new  purchases  of  equipment, 
locomotives.  Now,  under  this  bill  as  it  is  drawn,  each 
one  of  those  changes  makes  a  change  in  the  rate  of 
the  tax.  It  is  not  a  tax  of  four  mills  on  every  railroad 
bond;  it  is  a  tax  of  four  mills  to  the  dollar  on  some  bonds, 
and  then  a  constantly  varying  rate  down  to  an  infini- 
tesimal fraction  of  a  mill,  depending  on  whether  the 
security  is  inside  the  State  of  New  York  or  whether 
the  security  is  partly  personal  or  partly  real  property. 
No  one  can  tell,  in  other  words,  what  the  tax  is  on  his 
bond;  and  until  that  is  ascertained  and  fixed  the  mort- 
gage cannot  be  recorded  under  this  bill.  Think  of  the 
intolerable  situation.  A  railroad  wishes  to  build  its  railroad 
with  an  issue  of  its  bonds;  it  wishes  to  record  a  mort- 
gage and  to  sell  the  bonds  for  that  purpose  and  to  pur- 
chase gradually,  by  certain  instalments  of  the  bonds,  the 
railroad  that  it  builds.  How  can  it  take  a  single  step?^ 
It  can't  even  record  its  mortgages  until  the  ratio  between 
its  personal  property  and  its  real  property,  which  is  not 
yet  in  existence,  is  fixed  by  the  State  Tax  Board. 

Then  there  is  another  objection.  Under  this  law  the 
tax  is  levied  on  the  bond,  not  on  the  mortgage,  and  if  any 
holder  fails  to  pay  for  his  tax  the  bond  can  be  sequestered 
and  sold,  and  trouble  at  once  caused,  for  you  can't  al- 
ways get  hold  of  your  bond  to  sell  it.  So  this  law  has  a 
beautiful  provision  that  the  State  Assessors  can  sell  the 
bond  without  taking  possession  of  it.  In  other  words,  if 
somebody  fails  to  pay  a  tax  on  his  New  York  Central 
four,  the  State  assessors  can  sell  that  bond;  and  thereafter 
we  have  the  curious  situation  that  there  are  two  bonds  on 
the  market,  both  representing  that  original  bond,  one  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    275 

them  valid,  and  the  other  invahd,  and  nobody  can  tell 
which  is  which. 

In  other  words,  carried  out  to  its  conclusion,  this  bill 
would  utterly  destroy  the  negotiability  of  negotiable  bonds. 
No  one  who  bought  a  bond  on  the  market  could  tell 
whether  he  was  buying  the  bond  that  was  valid  or  the  one 
that  was  invaUd. 

What  do  you  think  would  be  the  result  of  a  law  which, 
in  one  blow,  will  make  the  bonds  of  all  such  corporations 
unsalable  outside  of  the  State?  Of  course  it  would  en- 
tirely paralyze  it. 

It  seems  to  me  that  on  all  these  grounds  a  tax  law  of  this 
sort  will  produce  the  most  calamitous  results,  particularly 
in  the  City  of  New  York. 

ADDRESS   BY  CHARLES   A.    SCHIEREN  OF   BROOKLYN 

Gentlemen:  The  Savings  Banks  of  the  State  are  very 
much  alarmed  over  this  mortgage  tax,  as  you  see  by  the  large 
delegation  present  here  to-day,  coming  from  all  parts  of  the 
State.  They  consider  it  a  dangerous  measure  which  may 
seriously  affect  the  banks.  It  may  compel  them  to  reduce 
the  interest  to  three  per  cent,  instead  of  the  rate  we  are 
now  paying  to  our  depositors.  Our  Savings  Banks  are 
largely  dependent  upon  the  revenue  from  mortgages  in 
order  to  pay  the  per  cent,  which  we  are  now  paying.  Other 
securities  permitted  by  law  hardly  realize  three  per  cent., 
whereas  mortgages  bring  from  four  to  five  per  cent.  This 
enables  the  bank  to  pay  the  present  rate  in  most  cases  of 
three  and  one  half  per  cent. 

Our  Savings  Banks  are  now  holding  about  five  hundred 
million  dollars'  worth  of  mortgages.  The  proposed  tax 
of  four  mills  will  amount  to  two  million  dollars  annually 
in  tax.  That  amount,  added  to  the  tax  already  on  the 
surplus  of  the  Savings  Banks,  which  amounts  to  seven 
hundred  and  fifty  thousand  dollars,  will  be  an  enormous 
increase  to  the  burden  upon  the  banks.  The  execution 
of  the  proposed  mortgage  tax  law  is  most  cumbersome  and 
will  create  considerable  confusion.     It  will  necessitate 


276  HISTORY  OF  THE  SAVINGS  BANKS 

much  extra  work  and  additional  expense  to  our  banks. 
Many  banks  hold  mortgages  not  yet  due,  and  will  have 
to  pay  the  tax.  The  calling  of  so  many  mortgages  due, 
by  the  banks  and  other  institutions,  would  seriously 
affect  the  money  market.  There  is  no  doubt  it  would 
create  great  distress  among  the  borrowers. 

Gentlemen,  we  are  opposed  to  this  bill  because  it  is 
wrong  in  principle.  It  means  double  taxation.  Its  pro- 
visions are  confusing  and  the  execution  will  add  con- 
siderable expense  to  our  mortgage  holders.  It  means 
additional  hardship  to  our  laboring  class.  It  is  a  heavy 
burden  to  the  thrifty,  frugal,  struggling  mechanic  or  farmer 
who  is  ambitious  to  own  his  own  homestead — the  very 
people  whose  burdens  we  should  strive  to  lighten  instead 
of  increase.  With  your  permission  I  will  call  upon  Mr. 
Hun,  of  the  Albany  Savings  Bank. 

Marcus  T.  Hun:  Mr.  Chairman  and  Gentlemen  of 
the  Committee:  I  assume  that  the  convenience  or  incon- 
venience of  this  measure  has  been  discussed  in  the  Legis- 
lature, and  that  that  line  of  argument  is  hardly  any  longer 
open  for  the  consideration  of  a  Committee  which  is  ob- 
ligated by  the  decision  of  the  party  caucus;  but  I  cannot 
but  feel,  as  a  member  of  the  party  which  is  responsible 
for  this  measure,  that  it  cannot  afford  to  pass  a  second  tax 
bill  of  the  importance  of  this  one  and  have  this  bill  also 
declared  unconstitutional  by  the  courts  of  the  State.  I 
think  the  people  of  this  State,  in  presenting  the  power  of 
legislation  to  any  political  body,  expect  that  that  legis- 
lation will  be  mtelligently  conducted,  and  that  the  meas- 
ures which  have  been  adopted  by  the  party  will  be  capable 
of  enforcement.  I  shall,  therefore,  so  far  as  my  remarks 
are  concerned,  address  myself  entirely  to  the  constitu- 
tional features  connected  with  this  legislation.  I  think 
it  is  of  very  great  importance,  in  order  that  we  should 
understand  each  other,  that  we  should  have  some  com- 
prehension of  the  views  which  have  prevailed  in  the 
preparation  of  this  measure.  As  I  understand  it,  it 
is  not  the  purpose,  at  least  in  terms,  of  this  bill  to  tax  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    277 

bonds  to  which  the  mortgages  are  collateral.  Whatever 
influence  may  be  brought  to  bear  to  induce  the  payment  by 
the  bondholders  of  the  tax  which  is  imposed  upon  the 
debt,  there  is  no  intention  to  run  athwart  of  the  provisions 
of  the  Constitution,  or  the  limited  jurisdiction  of  this 
State,  by  attempting,  in  terms  at  least,  to  impose  a  tax 
upon  bonds  which  may  be  held  by  non-residents,  over 
whom  this  State  has  neither  jurisdiction  of  their  person 
nor  of  their  property.  This  measure,  as  I  assume,  has 
been  drawn  with  an  attempt  to  evade  the  provisions  of  the 
decision  of  the  Court  of  Appeals  in  the  matter  of  Palmer 
in  150  New  York,  and  the  decision  in  the  United  States 
Supreme  Court  in  15  Wallace,  the  foreign- holding  bonds 
case,  which  decided  that  the  Legislature  of  a  State  had  no 
authority  to  impose  a  tax  upon  a  non-resident  because  of 
his  holding  bonds  which  were  secured  by  mortgage  upon 
property  within  the  State ;  and  to  bring  the  case  within  the 
decision  in  116  United  States,  of  the  Savings  Society 
against  the  Multnomah  County,  which  is  the  decision  in 
that  court,  holding  that  under  the  conditions  presented 
by  the  legislation  which  was  brought  before  that  court  in 
the  case  there  was  authority  on  the  part  of  the  Legisla- 
ture to  impose  a  tax  upon  what  was  therein  designated  as 
a  debt  and  a  mortgage  lien;  and  this  bill,  as  nearly  as  I 
can  judge  from  its  phraseology,  is  intended  to  come  within 
the  scope  and  purpose  and  within  the  protection  of  that 
decision.     Am  I  right  about  that,  Mr.  Allds? 

Senator  Allds :  Well,  you  argued  this  bill  three  years  ago 
with  the  gentleman  who  drew  that  provision — Mr.  Clark, 
present — and  he  told  you  at  that  time,  I  think,  that  it  was 
intended  to  come  within  the  Multnomah  case ;  and  if  Mr. 
Clark  was  correct  at  that  time,  then  the  bill  is  correct 
now;  and  if  you  were  correct  in  your  opinion,  I  suppose 
that  the  bill  isn't  any  more  constitutional  to-day  than  it 
was  three  years  ago. 

Mr.  Hun:    Well,  I  don't  know  about  that,  sir. 

Senator  Allds:  Well,  it  hasn't  been  changed.  I  want 
to  say,  Mr.  Hun,  that  it  hasn't  been  changed  any  from 


278  HISTORY  OF  THE  SAVINGS  BANKS 

the  phraseology  of  the  bill  three  years  ago — ^what  was 
known  as  the  Stranaham  Mortgage  Tax  Bill — so  far  as 
that  is  concerned. 

Mr.  Hun:  Now  the  distinction  between  that  case  and 
the  present  case  is  that  in  that  case  there  was  an  attempt 
made  to  tax  the  interest  of  the  mortgagee  in  the  real  es- 
tate which  was  covered  by  the  mortgage.  In  other  words, 
as  defined,  although  not  perhaps  exactly  expressed  in  that 
way  in  the  act  itself,  but  as  its  purpose  was  defined  by  the 
Supreme  Court  of  the  United  States,  it  was  held  to  be  a 
tax  imposed  upon  the  interest  of  the  mortgagee  in  the 
real  estate,  and  that  interest  being  subject  to  a  tax  im- 
posed by  the  bill  then  under  consideration,  the  only 
tax  which  was  imposed  upon  the  owner  of  the  real 
estate  was  a  tax  upon  the  residuum  of  the  real  estate 
which  was  left  after  the  value  of  the  mortgage  had  been 
deducted  from  the  value  of  the  real  estate.  In  other  words, 
if  the  real  estate  was  mortgaged  to  the  extent  of  sixty 
per  cent,  of  its  value,  there  was  a  tax  of  sixty  per  cent, 
of  the  value  of  that  real  estate  imposed  upon  the  holder 
of  the  mortgage,  and  there  was  a  tax  imposed  upon  the 
owner  of  the  real  estate  of  only  forty  per  cent,  of  the 
value  of  that  real  estate. 

So  that  was  practically  a  decision  by  the  Legislature 
of  that  State  that  they  proposed  to  tax  the  real  estate  or 
property  in  two  ways — they  proposed  to  tax  the  interest 
of  the  owner  of  the  real  estate,  and  they  proposed  to  tax 
the  interest  which  the  mortgagee  held  in  that  real  estate, 
which  they  chose,  by  act  of  Legislature,  which  the  Supreme 
Court  of  the  United  States  said  they  had  a  right  to  do, 
to  make  property,  although  it  was  a  mere  lien  under  the 
laws  of  that  State. 

Now  that  is  entirely  different  from  the  condition  which 
presents  itself  here,  because  here  we  propose  to  allow  the 
owner  of  the  real  estate  to  pay  the  tax  on  all  the  real  estate 
there  is.  There  is  no  exemption  from  liability  to  tax  on  the 
part  of  the  real  estate  because  of  the  fact  that  we  imposed, 
in  some  form,  upon  this  mysterious  thing  called  a  "lien," 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    279 

a  certain  burden  of  taxation;  and,  therefore,  the  attempt 
here  is  not  as  it  was  decided  in  the  United  States  Court 
in  this  Saving  Society  case,  that  the  State  had  a  right  to 
tax  the  real  estate  as  it  was;  but  the  attempt  here  is  to 
tax  an  intangible  thing  which  is  not  property,  in  addition 
to  taxing  the  property  itself  to  the  full  value.  Now,  in 
order  that  I  may  not  appear  to  give  my  own  construction 
to  this  decision  of  the  Supreme  Court,  I  beg  the  attention 
of  the  Committee  while  I  read  a  portion  of  it  from  the 
report  of  the  case. 

"Taking  all  the  provisions  of  the  statute  into  consideration,  its 
clear  intent  and  effect  are  as  follows:  The  personal  obligation  of  the 
mortgagor  to  the  mortgagee  is  not  taxed  at  all.  The  mortgage 
and  the  debt  secured  thereby  are  taxed  as  real  estate  to  the  mort- 
gagee, not  beyond  their  real  cash  value,  but  only  so  far  as  they 
represent  an  interest  in  the  real  estate  mortgage.  The  debt  is  not 
taxed  separately,  but  only  together  with  the  mortgage,  and  is  con- 
sidered as  indebtedness  within  the  State  for  no  other  purpose  than 
to  enable  the  mortgagor  to  deduct  the  amount  thereof  from  the 
assessment  upon  him  in  the  same  manner  as  other  indebtedness 
within  the  State  is  deducted,  and  the  mortgagee  as  well  as  the 
mortgagor  is  entitled  to  have  deducted  from  his  own  assessment 
the  amount  of  his  indebtedness  within  the  State.  The  result  is  that 
nothing  is  taxed  but  the  real  estate  mortgaged.  The  interest  of 
the  mortgagee  herein  being  taxed  to  him  and  the  rest  to  the  mort- 
gagor, there  is  no  double  tax  nor  is  there  any  such  discrimination 
between  the  mortgagors  and  mortgagees  as  between  resident  and 
non-resident  mortgagees  as  to  deny  to  the  latter  the  equal  protec- 
tion of  the  laws.  No  question  between  the  mortgagee  and  the 
mortgagor  arising  out  of  the  contract  between  them  in  regard  to  the 
payment  of  taxes  or  otherwise  is  presented  or  can  be  decided  upon 
this  record." 

Now  you  had  prepared  a  law  here,  or  the  Legislature 
has  under  consideration  a  law  by  which  you  propose  to 
determine  this  question  between  the  mortgagor  and  the 
mortgagee  which  was  not  determined  in  this  case,  upon  the 
lines  of  which  the  present  bill  was  drawn,  and  you  say  to  the 
debtor  owing  a  bond  to  the  non-resident  of  this  State :  "If 
the  non-resident  of  this  State  doesn't  come  here  and  pay 
this  tax  I  forbid  you  to  pay  him  either  the  principal  or  the 


28o  HISTORY  OF  THE  SAVINGS  BANKS 

interest  of  that  bond."  So  that  is  legislation;  unlike  the 
legislation  in  the  Savings  Association  case,  you  under- 
take to  say,  as  between  the  mortgagor  and  the  mortgagee, 
that  unless  the  bondholder  under  a  mortgage,  being  a  non- 
resident of  the  State,  over  whom  you  have  no  jurisdiction, 
either  as  to  person  or  property,  comes  into  this  State  and 
pays  this  tax  upon  the  debt  or  obligation,  that  he  shall 
receive  neither  the  principal  nor  the  interest  on  this  debt; 
and,  further  than  that,  that  if,  for  a  certain  period  of  time, 
he  fails  to  make  this  payment,  that  this  claim  that  he  has 
against  the  mortgagor,  by  whatever  term  you  may  desig- 
nate it,  shall  be  sold  and  that  the  party  who  purchases  that 
claim  shall  be  substituted  in  his  place  and  subrogated  to 
his  rights. 

Now  that  may  be  law,  but  what  I  mean  to  say  is  that 
the  decision  of  the  Supreme  Court  of  the  United  States, 
in  terms,  distinguishes  that  case  from  the  case  which  is 
presented  by  the  present  bill. 

I  should  prefer  to  take  the  decision  of  the  Court  of 
Appeals  of  our  own  State,  which  decided  in  the  matter  of 
Bronson  150  New  York;  and  if  they  decide  the  same  way 
in  this  case,  this  case  will  never  see  the  Supreme  Court  of 
the  United  States — that  it  doesn't  lie  within  the  power 
of  the  Legislature  of  this  State  to  tax  a  bondholder 
who  is  not  a  resident  of  this  State  upon  the  debt  or  obli- 
gation. 

Now,  you  may  say  that  by  careful  verbiage  and  ex- 
clusion of  words  you  have  in  this  case  evaded,  by  expres- 
sion at  least,  the  thought  that  you  impose  a  tax  upon  the 
non-resident  of  this  State  who  holds  this  bond;  but  I  don't 
believe  that  the  Court  of  Appeals  will  be  deceived  or  will 
be  misled  by  a  statement  of  that  kind  in  the  bill,  when 
you  say  to  the  man  who  lives  in  New  Jersey:  "If  you  don't 
pay  this  tax  on  amount  of  this  bond" — I  don't  care  what 
you  call  it,  debt,  or  obligation,  or  other  word — "if  you 
don't  pay  the  amount  that  you  owe  upon  this  thing  which 
you  hold,  representing  a  claim  against  a  resident  of  the 
State  of  New  York,  secured  by  mortgage  upon  its  prop- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    281 

erty,  we  will  say  to  the  debtor  that  he  shall  not  pay  you 
principal  or  interest,  and  after  a  certain  expiration  of 
time  we  will  forfeit  your  claim  and  sell  it  out  for  the 
amount  of  what  we  call  the  "tax"  and  deprive  you  for- 
ever of  any  claim  whatever  against  your  debtor."  I 
don't  believe  when  you  present  that  to  the  Court  of 
Appeals  that  the  Court  of  Appeals  will  say  otherwise 
than  that  that  is  an  attempt  to  tax  the  bond  which  this 
man  in  New  Jersey  is  possessed  of,  and  if  they  do  hold  so, 
they  hold  no  differently  from  what  they  held  in  consid- 
ering the  Transfer  Act  in  the  matter  of  Bronson,  in  which 
they  held  that  a  bond  held  by  a  non-resident,  being  out 
of  the  State,  was  not  taxable. 

Now  I  grant  you  if  the  bond  is  within  the  State,  al- 
though the  owner  may  be  without,  that  under  the  decision 
of  the  Court  of  Appeals  it  is  taxable ;  but  I  am  speaking  of 
the  case  in  which  a  man  in  New  Jersey  holds  the  bond  in 
his  o^vn  possession  in  New  Jersey.  I  don't  deny  your 
right  in  a  certain  sense  to  tax  the  mortgage  lien;  I  don't 
deny  your  right  to  say,  as  they  said  in  the  Savings  Insti- 
tutions case:  "You  may  consider  this  as  part  of  the  real  es- 
tate and  we  will  tax  it";  so  that,  so  far  as  this  feature  of  the 
case  is  concerned,  it  would  seem  that  as  to  all  bonds  held 
by  non-residents,  and  all  are  usually  so  held,  and  all  will 
be  so  held  if  you  offer  a  premium  of  four  mills  to  every 
man  out  of  the  State  as  against  every  man  in  the  State 
who  is  a  holder  of  these  bonds,  you  haven't  any  power  to 
tax  them ;  that  you  can  take — having  taxed  the  real  estate 
to  its  full  value — this  imaginary,  intangible  thing  called  a 
lien  and  destroy  that  when  you  can't  destroy  the  debt 
itself,  I  deny.  And  I  deny  that  you  have  any  authority 
that  you  can  produce  of  any  court  of  competent  jurisdic- 
tion to  determine  this  question  in  this  case  which  has 
ever  held  to  that  effect. 

Now  in  this  connection  it  was  said  at  the  last  hearing 
that  the  railroad  mortgages  in  this  State  had  been  so 
drawn  that  while  it  might  be  true  that  it  wouldn't  be 
practicable  to  enforce  this  lien  as  against  the  bondholder, 


282  HISTORY  OF  THE  SAVINGS  BANKS 

or  the  debtholder,  or  whatever  you  may  choose  to  desig- 
nate them  in  the  bill,  the  railroads  themselves  would  be 
obHged  to  pay  it.  Now  I  have  taken  pains  since  the  last 
hearing  to  make  inquiry  in  regard  to  the  principal  roads 
in  this  State.  The  West  Shore  mortgage  of  forty  millions 
of  dollars  contains  no  provision  in  regard  to  the  taxes 
other  than  the  provision  which  I  quote:  "The  said  Rail- 
road Company,  its  successors  and  assigns,  shall  and  will 
pay  all  taxes  and  assessments  lawfully  levied  or  assessed 
upon  the  premises  hereto  conveyed."  Of  course  it  would 
not  be  claimed  that  that  related  to  anything  except  the 
tax  that  was  assessed  directly  upon  the  property  of  the 
railroad  company;  it  would  not  relate  to  a  tax  upon  the 
debt  which  it  owed. 

The  New  York  Central  &  Hudson  River  mortgage 
for  one  hundred  millions  provides  that  it  will  pay  the 
interest  and  the  principal  without  deduction  from  either 
principal  or  interest  for  any  tax  or  taxes  imposed  by  the 
United  States  or  any  State  or  county  or  municipality 
there  of  which  the  railroad  company  may  be  required  to 
pay  or  to  retain  therefrom  under  that  by  reason  of  any 
present  or  future  law.  Now  you  have  provided  in  this 
bill  not  that  the  railroad  company  should  retain  any  tax; 
you  have  provided  that  when  the  bond  or  the  debt  is 
declared  delinquent,  that  the  debt  shall  be  sold  and  that 
thereafter  the  railroad  company  shall  not  pay  either  prin- 
cipal or  interest  to  the  man  who  was  the  holder  of  the 
bond  at  the  time  of  the  sale  or  at  the  time  the  delinquency 
occurred.  But  you  haven't  brought  this  in  this  bill 
within  the  scope  of  the  requirements  of  the  mortgage  of 
the  New  York  Central  &  Hudson  River  Railroad  Com- 
pany, which  provides  that  they  shall  be  liable  to  pay  the 
tax  only  in  case  they  shall  be  required  by  law  of  the  State 
to  retain  the  tax  upon  it.  But  the  difficulty,  it  seems  to 
me,  with  this  New  York  Central  clause,  even  if  you 
should  decide  that  it  was  applicable  to  a  tax  which  was 
lawfully  levied ;  inasmuch  as  the  tax  is  unlawfully  levied 
against  the  bonds  of  non-residents  it  isn't  a  tax  and  there- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    283 

fore  the  railroad  is  not  under  obligation  to  retain  the 
money,  because  there  is  no  tax  whatever  if  it  is  without 
jurisdiction. 

Now  the  difficulty  is  this:  Here  is  a  quantity  of  cou- 
pons that  are  presented  to  the  fiscal  officer  of  the  New 
York  Central  Railroad,  and  the  State  says:  "You  mustn't 
pay  those,  because  the  tax  hasn't  been  paid  in  that  case." 
Now  the  railroad  has  no  way  of  determining  whether  those 
bonds  which  are  represented  by  those  coupons  are  held 
within  the  State  of  New  York  or  not.  It  can't  trace  them 
back;  and  thereafter  you  say  to  the  railroad:  "Don't 
you  pay  either  principal  or  interest  on  that  debt;  we  are 
going  to  sell  it." 

If  the  bonds  that  are  held  outside  the  State  of  New  York 
are  exempt  from  the  four  mills  tax,  these  bonds  will  nat- 
urally come  out  from  the  Savings  Banks  and  go  to  similar 
institutions  in  some  other  State  and  the  Savings  Banks 
will  buy  the  bonds  of  other  States  which  are  not  subject 
to  this  tax;  and  you  will  soon  find  in  the  course  of  a  very 
short  time  that  the  Savings  Banks  are  all  supplied  by 
non-taxable  bonds  and  that  the  bonds  of  our  own  State 
have  gone  off  into  other  States  where  you  can't  control 
them.  There  are  one  or  two  other  features  about  this 
bill  which  I  would  like  to  call  to  the  attention  of  the 
Committee.  Now  I  think  it  was  suggested  by  his 
honor  at  the  last  hearing,  Mr.  Allds,  that  there  was  no 
provision  for  the  assessment  in  this  case — well,  I  perhaps 
have  stated  it  too  broadly,  because  it  seems  to  me  that  no 
tax  can  be  imposed  within  the  terms  of  our  constitution 
unless  the  party  who  is  to  be  taxed  has  an  opportunity  to 
be  heard,  and  if  he  has  an  opportunity  to  be  heard,  of 
course  that  constitutes  the  assessment,  and  this  bill 
has  very  properly  provided  that  this  hearing  shall  be  had 
before  the  State  Tax  Commission.  Now  in  order  that 
this  matter  should  get  before  the  State  Tax  Commission- 
ers, this  man,  having  the  constitutional  right  to  be  heard 
upon  the  question  as  to  whether  he  is  taxed  properly  or 
improperly,  whether  the  amount  is  right,  is  obligated  to 


284  HISTORY  OF  THE  SAVINGS  BANKS 

pay  his  tax  in  the  first  instance  to  the  State  of  New  York. 
Now  if  he  has  this  inherent  right  under  the  provisions  of 
the  Constitution  to  be  heard  before  he  is  taxed,  the  State 
of  New  York  clearly  has  no  right  to  tax  him  before  he  is 
heard — which  they  do:  they  require  him  to  pay  this 
money  in  to  the  recording  officer — to  pay  it  back  after- 
ward. 

Mr.  Allds:  Isn't  the  first  hearing  that  he  has  after  the 
notice  which  is  published  by  the  county  clerk  of  the  as- 
sessment, under  and  by  virtue  of  the  bill;  that  is  his  first 
hearing,  and  he  has  full  notice  of  that,  and  if  he  had  any 
dissatisfaction  with  that  list  as  made  up  and  advertised 
he  may  first  have  a  hearing  there  for  its  deduction  by  the 
showing  that  there  has  been  a  partial  payment  or  that 
the  amount  for  which  it  stands  has  not  really  been  ad- 
vanced, or  anything  of  that  sort.  Isn't  that  his  hearing; 
and  after  it  has  then  been  once  determined  at  that  time 
by  the  recording  officer  he  has  his  appeal,  and  there  is  no 
provision  for  the  payment  until  after  he  has  had  his  day 
in  court  first,  with  the  recording  officer,  sir;  and  it  is 
following  exactly  the  provision  which  obtains  in  every 
case  with  reference  to  the  United  States,  which  is  that 
after  the  officer  who  has  the  right  to  impose  the  tax  has 
had  a  determination  that  thereafter  the  tax  shall  be  paid, 
and  then  you  litigate  the  question,  and  if  you  succeed  you 
get  3^our  money  paid  back,  and  if  you  don't  succeed  the 
money  stays  in  the  Treasury„  Now  there  is  no  provision 
by  which  this  is  paid  over,  either  to  the  State  Treasurer  or 
to  the  local  treasurer,  but  it  is  held  by  that  recording 
officer  subject  to  the  final  decision.  Now  I  am  frank  to 
say  that  in  the  drafting  of  that  bill  we  did  not  have  any 
intention  of  encouraging  litigation  such  as  the  Franchise 
Tax  litigation,  where,  when  the  question  was  presented 
to  the  court,  there  was  six,  eight,  or  ten  millions  of  dollars 
involved.  Our  theory  was  that  we  would  follow  that 
which  the  United  States  Government  has  adopted  from 
its  earliest  inception  down  to  the  present  time.  That  is 
after  the  first  determination  that  there  should  be  a  pay- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    285 

merit  in  of  the  money  involved,  in  accordance  with  the 
determination,  and  that  then,  after  the  money  had  been 
paid  in,  just  as  it  is  in  the  case  of  the  United  States,  it 
might  be  litigated.  It  would  probably  have  a  reason- 
able tendency  to  discourage  too  much  litigation,  and  yet 
there  wouldn't  be  any  hardships  in  the  case  of  honest 
difference  of  opinion  and  an  honest  desire  to  test  the  law, 
or  to  test  any  question  with  reference  to  any  one  set  of 
property. 

Mr.  Hun :  As  I  understand  this  law — of  course  I  haven't 
the  familiarity  that  you  have  with  it — I  understand  that 
this  protest  or  objection  is  presented  to  the  recording 
officer. 

Mr.  AUds:  That  is  the  place  where  he  makes  his  pro- 
test. 

Mr.  Hun :  The  recording  officer  makes  a  return  of  that 
to  the  State  Board  of  Assessors. 

Senator  Allds :  He  acts  upon  it.  And  if  he  is  dissat- 
isfied with  the  determination  of  the  recording  officer,  then 
there  is  the  return  to  the  State  Tax  Commissioner. 

Mr.  Hun:  I  think  it  isn't  in  there  clearly  that  you  have 
a  right  to  impose  the  payment  of  a  tax  upon  a  man  who 
wants  to  appeal,  and  that  is  another  question.  But  what 
I  have  found  in  this  bill,  I  think,  is  the  fact  that  there  are 
many  questions  that  have  to  be  determined  by  the  State 
Board  of  Assessors  which  cannot  be  determined  by  the 
recording  officer.  So  far  as  those  questions  are  concerned 
the  man  must  pay  his  tax  before  he  gets  a  decision.  If  I 
don't  know  the  rule,  I  apologize  for  my  error.  There  is 
the  further  objection  that  no  foreclosure  shall  take  place 
until  a  proceeding  for  a  determination  under  this  act  of 
this  tax.  It  seems  to  be  rather  a  hardship  on  a  man  that 
he  can't  get  his  mortgage  foreclosed.  That,  perhaps,  is  a 
matter  of  convenience. 

Senator  AUds:  That  is,  that  for  the  purpose  of  com- 
pelling the  payment  of  the  tax,  one  is  denied  the  right  to 
enforce  his  lien  in  the  courts  unless  he  has  paid  his  fair 
share  of  the  Government  expense. 


286  HISTORY  OF  THE  SAVINGS  BANKS 

Mr.  Hun :  That  would  be  quite  right,  but  you  foreclose 
the  unfortunate  man  who  has  paid  his  tax  as  well  as  the 
others.  His  remedy  is  only  in  a  foreclosure  of  the  mort- 
gage, and  you  say:  "This  mortgage  shall  not  be  fore- 
closed," and  of  course  it  can't  be  foreclosed  as  to  one  with- 
out the  other,  "it  shall  not  be  foreclosed  until  this  tax  is 
paid." 

Senator  Allds :  May  I  make  a  suggestion  to  you?  There 
isn't  the  slightest  difference  of  opinion  as  to  the  perfectness' 
of  the  phraseology  which  constitutes  the  bill,  and  I  am  sure 
that  every  member  of  this  Committee  would  be  very  happy 
indeed  to  receive  at  your  hands  a  suggestion  as  to  what 
you  would  regard  as  appropriate  language  to  cover  the 
situation. 

Mr.  Hun:  Mr.  Allds,  I  meant  to  have  stated  in  the 
opening  that  I  have  read  over  this  bill  with  a  good  deal  of 
care  two  or  three  times,  and  the  first  time  it  struck  me  as 
crude  and  exceedingly  difficult  of  execution,  and  each 
time  I  read  it  over  I  have  been  more  impressed  with  the 
ingenuity  that  has  been  shown  to  bring  it  within  the  con- 
stitutional limitations,  and  the  difficulty,  perhaps,  of  pre- 
senting those  constitutional  objections,  and  I  have  rather 
come  to  the  conclusion,  however,  that  unless  the  con- 
current power  were  given  to  mold  the  provisions  of 
the  Constitution,  that  an  omniscient  deity  could  not 
make  a  bill  purporting  to  cover  the  matter  covered 
by  this  bill  and  successfully  meet  with  the  constitutional 
questions. 

Mr.  Allds:  I  think  you  recognize  the  exact  situation 
that  we  are  in.  We  find  it  very  difiicult  to  follow  the 
instructions  which  are  given  to  us  and  to  deal  with  the 
question  of  contracts  now  in  existence,  and  we  are  very 
frank  to  express  our  limitations. 

Mr.  Hun :  If  I  may,  without  making  a  criticism,  make 
a  suggestion  which  is  that  these  provisions  limiting  the 
jurisdiction  of  the  courts  making  certain  decisions  final 
— which  are  so  detrimental  to  my  profession,  possibly 
good  for  the  people  of  the  State — ^are  exceedingly  dan- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    287 

gerous  provisions  to  put  in.  The  Constitution  has  pro- 
vided certain  courts  which  shall  decide  the  disputes  be- 
tween the  people  of  the  State  of  New  York,  and  I  doubt 
whether  a  body  of  assessors  can  be  said  to  be  a  competent 
body  to  determine  that  question. 

The  decision  of  the  Appellate  Division  in  this  Depart- 
ment in  the  State  Franchise  Tax,  which  was  made  sub- 
sequent to  the  introduction  of  this  biU — of  course  the  bill 
wasn't  prepared  with  any  reference  to  the  objections 
that  were  there  presented  in  that  decision — has  decided 
that  the  bill  as  it  is  now  drawn  is  unconstitutional,  I 
think,  clearly.  The  home  rule  feature  of  the  Constitu- 
tion provides  that  all  city,  town,  and  village  officers 
whose  election  or  appointment  is  not  provided  for  by  this 
constitution  shall  be  elected  by  the  electors  of  such  cities, 
towns,  or  villages  or  some  division  thereof,  or  appointed 
by  such  authority  thereof  as  the  Legislature  shall  desig- 
nate for  that  purpose.  Now  you  have  appointed  a  Board 
of  State  Assessors  who  are  to  pass  upon  certain  questions 
in  relation  to  this  tax,  and  although  we  unfortunately 
differ  on  that  subject,  I  still  think  that  the  State  Board  is 
the  assessing  board  in  this  case;  they  usurp  the  functions 
which  have  previously  been  exercised  by  the  local  as- 
sessors. 

Senator  Allds :  The  mortgage  itself  is  theoretically  as- 
sessed at  its  full  value.  The  assessment  is  placedthere  by  the 
State  Board  of  Assessors;  the  new  mortgage  is  assessed  at 
its  full  value,  isn't  it,  by  this  bill?  Do  they  perform  any 
function  with  reference  to  the  assessment?  Isn't  it  after 
the  face  of  the  mortgage  has  been  assessed,  at  a  rate  pre- 
scribed by  the  statute,  they  are  then  called  upon  to  exer- 
cise certain  ministerial  duties  with  reference  todetermining 
the  proportion  between  counties  and  things  of  that 
sort,  and  the  only  time  that  they  perform  anything  which 
could  be,  by  any  means,  said  to  be  an  assessment,  is  the 
proposition  of  this  bill  seeking  only  to  reach  real  estate, 
that  where  they  determine  what  proportion  of  a  mortgage 
is  represented  by  personal  property  and  what  by  real 


288  HISTORY  OF  THE  SAVINGS  BANKS 

estate  in  the  case  of  a  mortgage  which  covers  both  real 
and  personal.  Now  isn't  that  the  only  time  in  this  bill 
that  they  reach  the  proposition  of  an  assessment?  Isn't 
the  Legislature  doing  the  assessing  by  the  act  and  at  the 
full  value  of  the  mortgage? 

Mr.  Hun:  Well,  I  deny  that  proposition.  I  thought 
you  agreed  with  me  in  that,  that  the  Legislature  hasn't 
power  to  say  that  a  piece  of  property  which  I  own,  if  you 
will,  in  the  city  of  Albany,  shall  be  assessed  at  a  certain 
rate.  It  has  not  the  power,  for  example,  to  say  that  a  piece 
of  property  shall  be  assessed  at  the  rate  which  the  present 
owner  has  paid  for  it  in  obtaining  title. 

Senator  Allds:  The  present  Legislature  says  that  it 
shall  be  assessed  at  its  full  value,  and  you  have  taken  that 
which  is  the  statement  of  the  man  in  interest  at  its  full 
value. 

Mr.  Hun:  Still,  he  is  entitled  to  be  heard,  I  think,  and 
he  isn't  heard  on  that. 

Now,  in  this  case,  you  have  not  created  a  new  piece  of 
property  which  you  propose  to  assess,  but  you  have  taken 
something  that  has  always  been  assessed,  and  if  I  am 
right  in  my  contention,  that  your  State  Assessors  are  to 
make  an  assessment  under  this  bUl,  then  the  bill  is  clearly 
unconstitutional  within  the  decision  of  the  Franchise 
Tax. 

If  the  Legislature  itself  had  the  right,  they  could  prob- 
ably delegate  it  to  somebody  else,  but  the  Constitution 
provides  that  certain  things  shall  be  done  by  certain  offi- 
cers and  that  those  certain  officers  shall  be  local  officers. 
The  only  question  is  whether  the  assessing  officer  is  the  State 
Board  of  Tax  Commissioners  or  whether  he  is  the  county 
clerk.  I  am  not  so  sure  that  if  you  make  the  county  clerk 
the  man  but  you  have  escaped  the  consequences,  and  that 
is  your  view  of  the  situation. 

If  there  is  any  reasonable  question  in  regard  to  the  con- 
stitutionality of  this  tax,  if  this  matter  is  to  go  before  the 
court  as  the  Franchise  Tax  was  and  prove  a  failure,  is  it 
a  wise  thing  for  the  Legislature  to  pass  it;  is  it  good  pol- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    289 

itics;  is  it  good  morals,  is  it  good  for  the  interests  of  the 
State?    I  don't  beHeve  it  is. 

ADDRESS  or  CHARLES  STONE,  OF  THE  ONONDAGA  SAVINGS 
BANK,    SYRACUSE 

I  have  heard  it  said  sometimes  that,  whatever  was  to  be 
said  against  this  bill,  it  must  be  fairly  admitted  that  it 
presented  a  better  system  than  that  now  prevailing,  that 
it  is  an  improvement,  or  offers  an  improvement,  upon 
the  system  of  taxation  of  personal  property  in  this  State, 
but  the  proper  improvement  in  the  direction  of  taxing 
personal  property  in  the  State  of  New  York  at  this  time 
would  be  an  act  exempting  all  mortgages  from  taxation. 

You  will  thus  do  away  with  the  old  argument,  which  has 
been  so  often  presented  and  which  I  think  is  so  forcible, 
of  double  taxation  of  that  species  of  property. 

Practically,  mortgages,  it  may  be  said,  have  been  taxed 
irregularly  and  at  irregular  amounts,  as  other  personal 
property  has  been  taxed,  I  think,  as  a  matter  of  fact, 
that  mortgages  have  been  very  little  taxed  or  assessed 
in  the  State,  that  form  of  taxation  having  proven  det- 
rimental and  having  become  so  objectionable  in  the  com- 
munities where  assessments  are  levied  by  the  local  au- 
thorities that  it  has  very  largely  disappeared.  One  effect, 
therefore,  of  this  legislation,  it  appears  to  me,  which  is 
wrong,  is  that  it  wrongly  discriminates  between  like  kinds 
of  property  in  making  assessments.  If  other  personal 
property  is  to  be  assessed  at  all,  it  should  be  assessed 
at  two  per  cent.,  and  if  mortgages  are  properly  assessed 
at  all,  they  should  be  assessed  at  two  per  cent.  If  mort- 
gages are  properly  assessable  at  all,  and  are  assessable  as 
personal  property,  they  should  be  assessed  at  the  same 
rate  that  other  personal  property  is  assessed  at. 

If  the  revenues  derived  from  the  assessments  of  other 
kinds  of  personal  property  belong  to  the  local  treasuries, 
then  the  revenues  to  be  derived  from  the  assessment  of 
mortgages  belong  to  the  local  treasuries  and  should  not 
be  diverted  or  any  part  of  it  to  the  State  Treasury. 


29©  HISTORY  OF  THE  SAVINGS  BANKS 

So  that  I  think  I  will  state  as  my  first  objection  to  this 
bill  of  a  general  character  that  it  improperly  and  mijustly 
discriminates  between  the  kinds  of  personal  property  and 
the  mode  of  taxation  thereof. 

Another  objection  that  occurs  to  me  in  a  general  way 
against  this  bill  is  that  it  appears  to  me  to  unjustly  dis- 
criminate— an  act  of  the  Legislature  unjustly  discrimi- 
nating against  the  people  of  the  State  of  New  York,  the 
citizens  of  the  State.  The  New  Jersey  man,  or  the  man  of 
any  other  State,  who  is  in  need  of  money  and  has  to  secure 
it  upon  real  estate  security,  may  obtain  it  without  the 
payment  of  this  tax. 

That  under  the  provisions  of  this  bill  a  man  can  go 
across  the  river  from  New  York  City  and  borrow  money 
in  New  Jersey  and  not  pay  any  tax  on  it,  but  if  the  man 
in  New  Jersey  wishes  to  come  over  into  New  York  City 
and  borrow  money  on  real  estate  there  and  leave  his  money 
here  and  help  out  the  State  of  New  York,  he  has  got  to 
do  it  with  the  added  burden  of  this  tax,  providing  the 
provisions  of  this  bill  can  be  enforced. 

I  am  here  as  a  trustee  and  an  officer  of  the  Savings  Banlcs 
of  this  State,  and  I  want  to  call  your  attention,  gentlemen, 
in  all  seriousness,  to  the  proposition  that  the  time  has  come, 
in  the  State  of  New  York,  when  the  best  intelligence  and 
the  loftiest  patriotism  of  the  members  of  the  Legislature 
of  the  State  must  be  directed  toward  the  preservation  and 
upbuilding  of  those  institutions,  or  you  are  bound  to  see, 
under  the  conditions  and  prospect  of  affairs  for  the  future, 
an  important  deterioration  in  the  high  quality  which  they 
now  stand  for;  and  any  deterioration  in  the  security  and 
the  advisability  of  the  Savings  Bank  system  of  this  State 
means  a  greater  disaster,  in  my  opinion,  to  the  weKare 
of  the  State,  permanently  considered,  than  would  a  like 
disaster  to  any  other  class  of  monied  or  industrial  insti- 
tutions which  can  be  named. 

It  has  been  the  policy,  sir,  of  this  State  from  the  com- 
mencement, to  in  every  way  foster  and  encourage  these 
institutions,  because  thereby  has  been  encouraged  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    291 

thrift  of  the  mechanic  and  of  the  workingman  who  is  able 
to  lay  up  a  few  dollars  every  year  for  surplus.  So  far 
as  I  am  aware,  until  within  very  recent  years,  no  Legisla- 
ture has  seen  fit  to  impose  a  tax  upon  the  thrift  repre- 
sented by  these  Savings  Banks  in  any  form  other  than 
a  tax  upon  such  real  estate  as  they  should  own,  until  the 
tax  upon  surplus,  the  law  which  was  passed  a  few  years 
ago. 

If  this  idea  that  it  is  a  wise  and  sound  and  conservative 
policy  to  raise  the  revenues  for  the  expenses  of  the  govern- 
ment of  the  State  of  New  York  by  in  some  way  getting 
the  money  from  the  taxpayer  without  his  knowledge,  or, 
as  it  is  more  euphoneously  expressed,  by  indirect  tax- 
ation, is  correct,  that  does  not  justify  striking  at  this  mass 
of  wages  invested  in  mortgages,  and  discriminating  against 
that  in  favor  of  other  property  which  is  allowed  to  go  free. 

With  the  limited  range  of  investments  which  Savings 
Banks  can  now  make  or  which  they  have  been  able  to 
make  within  the  last  decade  or  more  within  this  State, 
it  has  been  a  close  struggle  with  Savings  Banks  to  be  able 
to  maintain  anything  like  a  safe  margin  of  security  be- 
tween their  liabilities  and  their  resources,  and  such  a 
margin  and  a  larger  margin  than  can  be  found  in  any 
Savings  Bank  in  this  State  ought  to  be  encouraged;  it 
ought  to  be  built  up.  The  depositor  should  be  encouraged 
and  guaranteed,  so  far  as  the  legislation  of  the  State  may 
guarantee,  of  the  absolute  security  of  the  funds  which  he 
shall  place  in  a  Savings  Bank  investment.  A  Savings 
Bank  deposit  should  be  as  carefully  guarded  as  a  Govern- 
ment bond. 

Now,  with  this  limited  line  of  investment  and  with  the 
market  value  of  money  as  it  has  gone  along  in  recent  years, 
the  margin  which  the  Savings  Banks  have  been  able  to 
accumulate  over  and  above  what  they  have  had  to  pay 
out  has  been  decreasing  all  the  time.  It  is  a  singular 
thing  that,  since  1893,  in  the  last  decade,  in  this  State 
which  has  been  growing  in  every  direction  so  much,  and 
where  property  and  wealth  have  accumulated  so  much. 


292  HISTORY  OF  THE  SAVINGS  BANKS 

it  is  a  singular  thing  that  there  are  only  two  more  Savings 
Banks  now  in  existence  in  the  State  of  New  York  than 
there  were  in  1893.  It  is  a  striking  circumstance,  gen- 
tlemen, that  a  new  Savings  Bank  could  not  start  now  and 
do  business. 

Since  I  came  here,  I  was  handed  some  figures  by  a 
Savings  Bank  in  the  western  part  of  the  State,  which  I 
think  pretty  fairly  tjpify  the  general  course  of  this  busi- 
ness, and  the  effect  which  the  proposed  legislation  will 
have  upon  Savings  Banks;  and  I  beg  your  permission  to 
call  your  attention  to  them.     They  are  not  long. 

In  the  first  place,  I  would  like  to  call  your  attention 
generally  to  this  fact:  there  is  one  billion  and  seventy- 
seven  millions,  in  round  numbers,  of  money  on  deposit  in 
the  Savings  Banks  of  the  State  of  New  York  in  the  aggre- 
gate, of  which,  in  round  numbers,  four  hundred  and  sixty 
millions  is  in  real  estate  mortgages,  not  including  railroad 
mortgages.  The  surplus  of  all  the  banks  in  the  State 
January  i,  1902,  was  one  hundred  and  seventeen  mil- 
lions, seven  hundred  and  fifty-four  doUars;  the  aggregate 
surplus  of  all  these  Savings  Banks  in  the  State,  January  i, 
1903,  was  one  hundred  and  thirteen  millions,  two  hundred 
and  twenty-six  thousand  dollars;  a  diminution  of  surplus 
for  the  year  1902  of  three  millions,  four  hundred  and  sixty- 
eight  thousand  dollars. 

Now  if  this  bill  were  to  be  enacted  and  become  a  law, 
based  upon  these  figures  the  four  mills  tax  on  the  mort- 
gage held  by  the  Savings  Banks,  diminished  by  the  sur- 
plus tax  which  they  are  now  paying — I  am  assuming  that 
the  Legislature  would  hardly  leave  that  burden  upon  the 
Savings  Banks  while  adding  this  one;  so  I  have  allowed 
for  that  as  though  that  law  were  repealed — that  four 
mills  tax,  deducting  that  surplus  tax,  would  amount  to 
one  million,  eight  hundred  and  forty  thousand  dollars, 
giving  a  prospect  of  a  decrease  of  the  surplus  in  the  next 
year  of  five  millions,  three  hundred  and  odd  thousand 
dollars. 

Now  you  take  this  particular  Savings  Bank — this  is  a 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK  293 

different  set  of  figures — I'd  like  to  show  you  a  little  con- 
cerning the  operations  of  one  of  the  most  prosperous  Sav- 
ings Banks  which  I  think  we  have  outside  of  the  City  of 
New  York  of  which  I  know  less.  The  average  income 
from  all  investments  of  this  particular  Savings  Bank  in 
the  last  year  was  three  and  nine  tenths  per  cent.,  ninety- 
one  one  hundredths.  The  interest  paid  on  deposit,  three 
and  one  half  per  cent,  deducted,  leaves  a  margin  for  ex- 
penses, based  on  assets  of  thirty-two-hundredths  of  one 
per  cent.,  which  will  also  furnish  whatever  surplus  that 
Savings  Bank  may  be  able  to  lay  aside  for  the  further 
security  of  its  depositors. 

Let  me  call  your  attention  to  another  thing,  with  respect 
to  the  operation  of  the  conditions  during  the  last  ten  years 
upon  Savings  Banks  in  this  State.  There  has  been  a 
diminution  in  the  percentage  of  surplus  held  by  the 
Savings  Banks  against  liabilities  during  the  last  ten  years 
of  three  and  six  tenths  per  cent,  upon  the  average,  taking 
all  the  Savings  Banks  together.  That  is  to  say,  in  1893, 
whereas  the  average  surplus  held  by  the  Savings  Banks  of 
the  State  was  fourteen  and  one  tenth  per  cent.,  it  fell  to 
ten  and  five  tenths  per  cent,  in  the  year  ending  January 
I,  1903.  I  have  caused  to  be  taken  samples  of  half  a 
dozen  different  banks  scattered  about  different  parts  of 
the  State,  Savings  Banks  of  different  sizes  and  conditions, 
so  as  to  show  you  how  they  are  generally  running. 

The  fiirst  one  I  find  had  a  surplus  in  1893  of  eighteen 
and  seven  tenths  per  cent.;  now  of  only  eleven  and  three 
tenths;  another  one  of  fourteen  and  eight  tenths,  now  of 
nine  and  four  tenths;  another  one  of  fourteen  and  five 
tenths,  now  of  nine  and  four  tenths;  another  one  ten  years 
ago  of  thirteen  and  one  half  per  cent.,  surplus  now  seven 
and  seven  tenths  per  cent. ;  another  one  ten  years  ago  of 
eleven  and  two  tenths,  now  of  eight  and  seven  tenths; 
another  one  ten  years  ago  of  nine  and  seven  tenths,  now 
seven  and  five  tenths;  another  one  ten  years  ago  of  eleven 
and  one  tenth,  now  seven  and  three  tenths. 

I  cite  these  figures,  gentlemen,  principally  to  call  your 


294  HISTORY  OF  THE  SAVINGS  BANKS 

attention  to  the  fact  that  Savings  Banks  have  not  to-day, 
under  existing  conditions,  a  sutiicient  working  margi^i  to 
secure  their  safety  and  permanence  for  the  future  "with 
any  such  certainty  as  has  prevailed  in  the  past ;  and  to  ask 
you  whether  this  is  a  proper  time  for  the  Legislature  to 
add  any  new  burdens  to  these  institutions.  If  this  tax  of 
four  mills  is  imposed,  no  matter  what  your  theory  may  be, 
whether  ultimately  the  load  falls  upon  the  borrower  or 
not,  if  this  tax  is  imposed,  somebody  will  have  to  pay  it, 
and  either  the  depositor  will  take  a  smaller  dividend — it 
is  now  only  three  and  one  half  per  cent. — either  the  deposi- 
tor will  take  a  smaller  dividend  on  his  deposit,  or  the 
borrower  will  pay  a  higher  rate  upon  his  loan.  There  is 
no  escape  from  one  of  these  conclusions.  If  the  depositor 
bears  the  burden,  then  upon  some  two  hundred  to  two 
hundred  and  fifty  thousand  people  in  this  State,  who, 
upon  the  average,  have  surplus  earnings  of  only  four  hun- 
dred and  seventy  dollars  each,  you  have  made  an  assured 
certain  requirement  of  the  payment  of  the  tax.  If  the  bor- 
rowers take  it,  while  the  number  will  be  smaller,  yet  they 
are  very  numerous,  and  the  rate  of  interest  which  they  have 
been  paying  upon  their  mortgages  will  "have  to  be  increased 
correspondingly.  There  is  no  other  fund  out  of  which  the 
money  can  be  paid. 

And  without  taking  your  time  any  further,  I  desire  to 
appeal  once  more  earnestly  for  the  reestablishment  of  the 
traditional  policy  of  this  State  which  has  put  the  Savings 
Banks  of  this  State  upon  a  higher  plane  than  they  stand 
in  any  other  State  in  the  country;  diminish  nothing  of  the 
safeguards  to  the  money  of  depositors;  simply  give  oppor- 
tunity within  a  limited  market  range  in  which  these 
institutions  can  operate  so  that  investments  of  the  deposi- 
tors' money  can  be  made  in  sound  securities  with  a  margin 
of  safety  and  so  as  to  yield  them  a  reasonable  return  for 
their  investment. 

The  Savings  Banks  are  doing  a  legitimate  business 
within  the  law;  their  trustees  are  ser^dng  without  compen- 
sation and  exercising  their  best  judgment,  but  some  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    295 

their  investments  are  depreciating  and  they  must  have  a 
margin,  otherwise  known  as  surplus,  to  guarantee  the 
depositor  safely  the  return  of  his  money;  and  this  act  will 
place  the  burden  upon  the  bank  which  will  be  freed  of  at 
least  one  half  of  all  the  money  they  earn  for  surplus  ex- 
penses and  operating  expenses  of  the  building  together 
in  the  course  of  the  year. 

Member  of  the  Assembly  Committee:  You  suggest 
that  the  proper  thing  would  be  to  exempt  all  mortgages 
from  taxation,  and  would  you  exempt  all  personal  prop- 
erty from  taxation? 

Mr.  Stone:  You  have  asked  me  a  fair  question.  Of 
course  it  is  a  little  dangerous  sometimes  for  a  man  to  make 
a  bold  statement,  when  he  hasn't  the  time  to  give  his 
reasons  for  it  throughout,  but  I  am  inclined  to  answer 
your  question  in  this  way:  Out  of  all  the  taxes — I  mean 
taxes  that  are  levied  directly  upon  property  and  collected 
in  the  general  way,  not  having  reference  to  special  fran- 
chise tax  or  collateral  inheritance,  or  any  of  those — out  of 
all  the  taxes  that  are  actually  collected  in  the  State  of 
New  York  not  three  per  cent,  are  collected  of  personal 
property  to-day.  Now  if  you  do  away  with  the  other 
ninety-seven,  and  collect  the  whole  hundred  by  a  direct, 
honest  tax,  fairly  imposed,  upon  the  real  estate  in  this 
State,  I  believe  in  a  short  time  everything  would  be  so 
adjusted  that  the  people  would  be  better  satisfied. 

ADDRESS   OF   MR.    RHOADES 

John  Harsen  Rhoades  said :  I  appear  here  representing 
somewhat  varied  interests.  As  President  of  the  Green- 
wich Savings  Bank,  as  director  of  the  United  States  Trust 
Company,  and  the  Lawyers  Title  Insurance  Company, 
and  as  trustee  of  several  large  estates,  I  directly  and  in- 
directly represent  about  seventy-five  millions  of  dollars 
invested  in  real  estate  mortgage  loans.  Therefore  I  ap- 
proach the  subject  in  question  at  least  with  years  of  ex- 
perience in  this  particular  class  of  investment. 

I  do  not  propose  to  take  the  time  of  this  Committee 


296  HISTORY  OF  THE  SAVINGS  BANKS 

in  going  over  the  details  of  this  bill.  They  have  been 
gone  over  repeatedly  before  you  by  men  better  able  to 
analyze  the  bill  than  myself.  I  do  not  propose  to  discuss 
the  question  as  to  whether  the  bill  is  constitutional  in  all 
of  its  parts ;  but  I  propose  to  ask  and  to  answer  the  follow- 
ing question  to  the  best  of  my  ability:  "  What  will  be  the 
first  effect  of  the  passage  of  this  bill  upon  those  holding 
real  estate  mortgages  and  those  seeking  to  obtain  loans 
upon  mortgage  secured  by  real  estate?  " 

The  volume  of  real  estate  loans  is  very  large.  I  believe 
the  statistics  show  that  the  average  value  per  acre  of  land 
in  the  State  of  New  York  is  $25,  and  that  the  average 
amount  borrowed  per  acre  upon  the  land  within  the  State 
is  $12  per  acre;  therefore  the  influence  of  the  passage  of 
any  bill  affecting  real  estate  loans  would  be  felt  from  one 
end  of  the  State  to  the  other  by  the  corporation,  the  Sav- 
ings Bank,  the  trust  company,  the  title  company,  the 
trustee,  the  individual,  the  manufacturing  establishment, 
and  the  farmer;  and  each  and  every  interest  loaning  money 
upon  this  class  of  property,  and  conscious  that  such  a  bill 
as  the  one  in  question  has  been  created  into  law,  will  at 
once  ask  himself  what  he  is  going  to  do  about  it,  and  what 
demands  will  he  make  upon  the  borrower  to  protect  him- 
self? So  far  as  my  own  bank  is  concerned,  our  first'  act 
would  be  to  send  a  notice  to  every  mortgagor  having  a 
loan  with  us  to  the  effect  that  this  bill  had  become  a  law, 
and  that  arrangements  must  be  made  at  once  to  pay  the 
tax  accruing  on  the  first  day  of  July,  and  that  the  rate  of 
interest  from  July  onward  would  be  increased  one  half  of 
one  per  cent,  per  annum;  and  if  arrangements  cannot  be 
made  satisfactorily  between  the  bank  and  the  borrower, 
payment  of  the  mortgage  must  be  made. 

There  is  an  unwritten  law  as  old  as  the  ages  which  says 
that  the  lender  of  money  is  entitled  to  and  will  exact 
such  terms  in  the  way  of  interest  upon  moneys  loaned  as 
are  satisfactory  to  him,  and,  if  such  terms  cannot  be  ob- 
tained, he  is  entitled  to  and  reserves  the  right  not  to  loan 
his  money.     Therefore  if  the  State  is  to  call  upon  him  to 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    297 

pay  a  tax  on  the  mortgages  held  by  him,  and  these  loans 
have  been  made  on  the  basis  of  a  rate  of  interest  satis- 
factory to  him  at  the  present  time,  you  may  be  sure  that 
these  loans  will  not  be  continued  unless  the  borrower  of 
the  money  makes  a  satisfactory  adjustment  with  the 
lender  of  the  amount  for  the  amount  of  tax  to  be  paid. 
Now  what  the  officers  of  the  bank  I  represent  will  do,  so 
will  the  officers  of  all  the  large  corporations,  including 
the  trust  companies  and  others,  and  so  to  a  very  large  ex- 
tent will  the  trustee  and  the  individual  lender  of  moneys 
do.  Therefore  it  may  be  taken  for  granted  that  the  bor- 
rowers of  moneys  secured  by  real  estate  throughout  this 
entire  State  will  be  notified  of  these  changed  conditions 
and  of  the  necessity  for  making  new  terms  with  the  lenders 
of  money.  The  effect  of  such  a  notice,  from  its  very 
nature,  must  be  to  create  excitement  and  a  great  deal  of 
distress  throughout  the  State.  Now  what  would  the 
Savings  Banks  located  in  the  interior  of  the  State,  having 
loans  upon  farming  property,  do  where  their  loans  were 
running  at  the  present  time  at  six  per  cent,  and  where  it 
would  be  illegal  to  force  an  additional  rate  equal  to  cover 
the  amount  of  the  proposed  tax?  Owing  to  the  reduction 
in  the  value  of  farm  property  in  recent  years,  the  margin 
between  the  loan  and  the  equity  has  in  very  many  cases 
become  very  close.  The  rate  for  money  is  always  gov- 
erned by  the  risk  that  is  run,  and  if  an  individual  or  a 
corporation  is  loaning  on  property  from  eighty  to  ninety 
per  cent,  of  its  real  market  value,  he  expects  to  get  a 
higher  rate  than  he  would  exact  were  the  margin  fifty  to 
sixty  per  cent.  Therefore,  in  the  case  of  all  such  loans  as 
these,  what  other  course  is  it  possible  for  the  officers  of  a 
bank  to  pursue  than  to  bring  pressure  to  bear  upon  the 
borrower  to  force  a  reduction  in  the  amount  loaned  upon 
the  property;  and  in  this  way  demands  would  be  made  to 
the  extent  of  millions  of  dollars  for  payment  on  account  of 
loans,  and  as  it  is  always  difficult  to  secure  large  loans  upon 
farm  property,  the  result  would  be  that  such  demands 
could  not  be  met,  and  numerous  foreclosures  would  ensue. 


298  HISTORY  OF  THE  SAVINGS  BANKS 

Can  such  a  condition  as  this  exist  without  creating  a  very 
serious  disturbance  to  the  interests  of  the  great  mass  of 
our  people  who  are  either  obliged  to  borrow  or  who  find 
uses  for  moneys  borrowed  on  their  real  estate;  and  will  such 
a  condition  do  otherwise  than  paralyze  the  entire  building 
interests  of  this  State? 

Nine  tenths  of  the  development  in  the  way  of  buildings 
of  all  kinds  and  descriptions  is  done  by  men  who  engage 
in  this  pursuit  as  any  man  engages  in  business  of  any  kind, 
and,  like  every  merchant,  they  are  required  to  use  their 
credit  and  to  obtain  loans  upon  their  property  in  order  to 
carry  on  the  development.  What  is  the  condition  of  these 
men  if  they  cannot  obtain  their  loans,  or  if  the  market  for 
such  loans  is  seriously  disturbed  or  narrowed?  Does 
it  mean  anything  else  for  these  men  but  ruin,  and  am  I 
extravagant  in  my  assertion  when  I  say  that  such  condi- 
tion would  ensue  at  once  as  to  make  a  financial  revulsion  in 
real  estate  which  would  ruin  thousands  and  paralyze 
real  estate  operations  for  years  to  come?  Therefore  I 
repeat  what  I  have  practically  already  said,  that  as  it  is 
with  the  Savings  Banks  I  represent,  just  so  it  is  with  the 
corporation  investing  in  mortgage  loans;  just  so  with  the 
individual.  Is  the  trustee  of  an  estate  going  to  have  this 
annoyance  every  year  of  attending  to  this  tax,  with  all  the 
penalties  which  ensue  in  case  it  is  not  paid,  and  all  the 
trouble  which  will  arise  in  case  of  neglect  or  through  for- 
getfulness?  Is  he  going  to  take  the  trouble  to  do  this? 
Why,  sir,  I  am  trustee  of  estates  now  which  would  gladly 
put  five  millions  of  dollars  into  mortgages  to-day  if  they 
were  exempt  from  liability  to  personal  taxation ;  but  I  beg 
to  assure  you,  with  all  calmness  and  moderation,  that  if 
this  law  went  into  force,  not  one  dollar  would  be  invested 
in  a  mortgage  under  conditions  that  would  exist  in  the 
event  of  the  passage  of  this  bill. 

Now  let  us  look  at  it  from  another  standpoint,  and  that 
is  the  position  of  the  individual  lenders  of  small  mortgages 
scattered  all  over  the  State.  There  are  thousands  of 
cases  where  small  trusts  exist,  created  by  men  who  in  their 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    299 

lifetime  made  a  little  money,  and  where  these  moneys  are 
in  the  hands  of  some  old  friend  to  whom  has  been  en- 
trusted the  savings  of  a  man's  Hfetime  with  instructions 
to  take  care  of  his  widow  and  children;  and  so  he  has  taken 
the  trusteeship  of  the  Httle  property.  He  has  invested 
some  of  it  in  bond  and  mortgage;  he  has  bought  a  few  rail- 
road bonds,  and  the  dragnet  of  the  tax  collector  has  not 
yet  scooped  him  in  and  squeezed  out  from  the  income  of 
those  helpless  people  one  half  of  all  they  are  entitled  to. 
All  the  mortgages  of  this  State  have  to  be  Usted.  The 
name  of  every  individual  and  of  every  trustee  is  put  down 
upon  such  lists.  Now  what  is  the  duty  of  the  tax  col- 
lector? Can  he  do  otherwise  than  take  advantage  of  just 
such  a  list  as  this?  And  if  he  finds  out  there  is  a  man 
here  or  there  who  has  got  one  or  more  of  these  mort- 
gages, is  it  not  his  duty  to  put  him  down  on  the  list  of 
personal  taxation?  Now  what  does  the  individual  or  the 
trustee  do  under  such  circumstances?  What  would  you 
or  I  do  under  such  circumstances?  Are  we  going  to 
assume  the  risk  of  being  taxed  either  upon  our  own 
property  or  upon  the  property  that  we  are  guarding  in 
trust  for  our  friend?  Well,  there  is  but  one  remedy.  The 
mortgage  must  be  called  in,  and  the  mortgage  will  be 
called  in.  And  so,  sir,  all  over  the  State,  the  result  of  the 
passage  of  this  bill  would  be  to  create  universal  distress 
among  the  very  class  of  borrowers  who  are  the  least  able 
to  stand  the  strain.  Why,  to-day,  in  the  City  of  New  York, 
men  are  walking  the  soles  off  their  shoes  trying  to  get 
mortgages  which  it  is  impossible  to  obtain.  They  apply 
to  the  life  insurance  companies:  "We  are  not  loaning." 
They  apply  to  the  Savings  Banks:  "We  are  not  loaning." 
They  apply  to  the  individual:  "We  are  not  loaning." 
And  why?  Simply  because  this  bill  is  pending  here  in  the 
Legislature  of  the  State  of  New  York.  I  tell  you,  sir, 
that  the  Legislature  in  this  regard  has  a  serious  matter 
upon  its  hands — a  matter  which  touches  the  very  heart 
of  the  prosperity  of  the  citizens  themselves.  I  tell  you 
again,  Mr.  Chairman,  that  in  my  honest  judgment  no 


300  HISTORY  OF  THE  SAVINGS  BANKS 

bill  of  late  years  has  been  introduced  in  this  Legislature 
so  fraught  with  peril  to  the  community  at  large  as  this 
Mortgage  Tax  Bill  which  is  now  before  you  for  your 
consideration. 

ADDRESS   OF   HON.   W.    BARLOW  DUNLAP 

Mr.  W.  Barlow  Dunlap,  of  the  Savings  Bank  of  Am- 
sterdam, said  in  part: 

There  are  hundreds  of  people  up  in  our  town — it  is  a 
manufacturing  town  who  never  saved  a  dollar  until  the  Am- 
sterdam Savings  Bank  was  started.  There  are  hundreds 
of  them  to-day  who  own  their  own  home  or  who  own  at 
least  half  of  their  home,  and  the  Savings  Bank  owns  the 
other  half,  who  began  when  the  bank  was  started  fifteen 
years  ago  by  putting  in  five  dollars  or  three  dollars  a  week 
and  got  seven  or  eight  hundred  dollars,  borrowed  a  little 
money  of  the  Savings  Bank,  borrowed  a  little  money  per- 
haps of  somebody  else,  and  built  them  a  house.  They  put 
their  money  in  until  the  end  of  the  year,  when  their  pay- 
ment comes  around,  and  they  have  one  or  two  hundred 
dollars;  they  get  a  little  credit  for  their  interest  in  the 
meantime.  You  are  hitting  those  people  both  ways,  and 
they  feel  it,  and  if  the  bill  becomes  a  law  they  wiU  resent 
it.  There  is  nothing  that  hits  a  man  so  quickly  as  to  hit 
him  in  his  pocketbook,  and  you  take  the  struggling  labor- 
ing man  with  a  little  piece  of  property  of  his  own  that  he 
is  trying  to  pay  for  and  let  a  tax  of  half  a  per  cent,  or 
four  tenths  of  a  per  cent,  be  added  and  he  will  remember 
it,  he  will  remember  it  particularly  because  he  has  got 
to  pay  just  before  election  time. 

The  people  don't  want  this  bill;  they  are  opposed  to  it; 
and  they  don't  believe  the  Legislators  ought  to  force  it 
on  them.  Speaking  strictly  for  the  Savings  Banks,  we 
don't  want  the  bill  for  the  reason  that  I  have  stated.  It 
will  take  one  half  of  our  annual  surplus  to  pay  this  amount 
if  we  take  it  out,  and  you  gentlemen  all  know  that  you 
can't  run  a  Savings  Bank  without  increasing  your  surplus 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    301 

inasmuch  as  your  depositors  are  constantly  increasing. 
Savings  Banks  are  not  there  for  the  purpose  of  making 
money,  as  one  of  the  gentlemen  said,  but  to  furnish  a  safe 
place  for  the  earnings  of  the  poor.  The  question  was 
brought  up,  how  many  deposits  have  you  of  three  thou- 
sand dollars?     In  our  bank  we  have  sixteen. 

We  have  eight  thousand,  five  hundred  and  sixteen 
depositors,  and  we  have  sixteen  who  have  three  thou- 
sand. We  have  had  opportunities;  we  have  had  letters 
that  New  York  people  have  written  us  who  wanted  to 
make  deposits  of  three  thousand  dollars  there  and  get 
three  and  one  half  per  cent,  interest.  Occasionally  some- 
body will  work  that  scheme  to  avoid  taxation.  We 
find  that  is  so  in  some  sections  where  they  do  follow  the 
mortgage  tax  very  closely.  Now  they  don't  impose  it 
fairly  at  all.  In  some  sections  they  go  to  the  County 
Clerk's  office  and  tax  a  man.  With  a  tax  of  two  per  cent. 
on  the  mortgage,  he  might  better  give  it  to  the  bank  at 
three  and  a  half  per  cent.  Other  sections  do  not  tax  at 
all,  don't  pretend  to.  For  that  reason  I  say  occasionally 
we  get  an  inquiry  from  some  section  of  the  State  where 
they  want  to  loan  us  some  money.  The  other  day  we  got 
an  application  from  Syracuse.  I  don't  know  whether 
they  tax  it  out  there  or  not.  We  decline  those  things, 
because  our  bank  was  started  simply,  solely,  and  wholly 
for  the  benefit  of  the  working  people  of  the  town,  and  we 
have  continued  it  on  that  basis. 

Why,  the  entire  expense  of  running  that  bank  with 
two  and  a  half  million  dollars,  including  our  banking  build- 
ing and  all,  is  less  than  fifty-four  hundred  dollars  a  year, 
and  yet,  with  all  that,  with  the  economy  of  management 
and  all,  we  were  only  able  to  add,  and  only  did  add,  in 
the  last  six  months  four  thousand  dollars  to  our  sur- 
plus. Now  with  one  million  dollars'  worth  of  bonds,  it  would 
take  our  four  thousand  dollars.  We  should  simply  have 
what  we  had  gained  the  other  six  months,  which  would 
probably  be  four  or  five  thousand  dollars  more.  That 
is  outside  the  question  of  the  surplus  tax  that  we  have 


302  HISTORY  OF  THE  SAVINGS  BANKS 

got  to  pay  besides.  I  assume,  as  everybody  has,  that 
that  would  be  repealed;  I  don't  imagine  for  a  moment 
you  would  try  to  give  us  both  of  them  at  once. 

As  I  said  before,  I  don't  want  to  take  your  time,  but, 
gentlemen,  as  I  gather  it  from  the  newspapers  and  from 
the  people  that  I  have  talked  with  in  the  different  counties 
around  that  section,  I  have  yet  to  find  a  man  seriously 
for  it.  They  think  it  is  a  mistake;  they  think  it  is  wrong 
in  principle,  and  they  think  that  the  Legislature  is  making 
a  great  mistake  in  putting  the  bill  through;  that  we  might 
better,  if  necessary,  pay  a  direct  State  tax,  a  small  amount 
as  we  did  last  year.  Why,  it  don't  amount  to  anything. 
Now,  let  me  give  you  a  little  illustration.  Mr.  Rhoades 
spoke  of  little  trust  estates,  I  happen  to  be  a  trustee  of 
a  little  estate  there ;  a  man  died  with  just  three  thousand 
dollars;  he  has  got  a  widow  seventy  years  old.  Every 
dollar  that  she  has  is  three  thousand  dollars.  I  took 
the  money  and  I  succeeded  in  loaning  it  at  six  per  cent. 
She  receives  one  hundred  and  eighty  dollars  a  year.  In 
order  to  avoid  the  tax  I  had  the  mortgage  taken  in  the 
name  of  a  man  in  Fulton  County  and  I  had  him  assign  the 
mortgage  to  me  as  trustee  and  I  hold  it.  Now  if  that 
poor  woman  had  to  pay  two  per  cent,  on  her  mortgage 
she  would  get  one  hundred  and  twenty  dollars  to  live  on. 
All  she  has  under  heaven  is  a  hundred  and  eighty  dollars. 
I  can  escape  the  tax  now;  with  this  bill  I  couldn't.  Now 
what  would  she  do? 

Senator  Green:  Now  I  want  to  get  at  this  point  in  all 
sincerity;  this  bill  proposes  to  levy  a  tax  of  four  mills. 
Now  as  long  as  we  have  got  this  situation  of  local  tax- 
ation where  mortgages  are  caught,  as  I  find  they  are,  about 
the  State  all  over,  isn't  it  really  better  for  the  ones  who  do 
get  caught  to-day  to  pay  four  mills  and  be  exempt  from 
all  other  kinds  of  taxation  than  to  pay  the  present  local 
taxation,  or  be  in  danger  of  paying  any  time  the  assessors 
put  it  on  the  roll? 

Mr.  Dunlap:  Undoubtedly,  but  that  doesn't  correct 
the  great,  glaring  wrong  that  exists  to-day;  you  are  only 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    303 

making  it  worse.  It  is  better,  of  course,  for  those  people 
under  this  bill  than  those  who  have  to  pay  two  per  cent. 
Of  course  four  mills  is  better  than  two  per  cent. 

Senator  Green :  There  are  so  many  people  who  use  that 
situation  and  are  dodging  taxation. 

Mr.  Dunlap:  That  is  the  point  exactly.  Now  there 
isn't  anybody  up  there  except  some  poor,  simple-minded 
person  who  don't  know  any  better  who  gets  caught  with 
their  taxes,  not  a  one.  Now  the  way  they  do — I  am  a 
lawyer — the  way  they  do,  they  make  a  mortgage  to  some- 
body who  is  absolutely  irresponsible,  take  their  chances, 
honest  fellows,  perhaps,  they  give  him  a  mortgage,  he 
assigns  it  to  the  party;  they  go  up  there  and  they  find  it 
on  the  record  that  there  is  a  mortgage  assessed  to  John 
Smith.  They  put  him  on  the  tax  roll  and  they  send  him 
notice,  and  John  goes  down  there  and  he  goes  up  and 
swears:  "I  haven't  any  property;  I  haven't  a  cent";  he 
swears  to  it,  and  it  is  true;  he  hasn't,  he  has  assigned  it  to 
the  other  fellow.  Now  what  are  you  going  to  do  about 
it?  That  fellow  escapes.  It  is  only  those  who  don't  go 
and  consult  some  really  good,  sharp  lawyer  and  find  out 
how  to  do  it  who  get  caught. 

Mr.  Albert  H.  Harris,  of  Rochester,  representing  the 
Rochester  Savings  Bank,  said: 

The  banks  in  Rochester,  the  Savings  Banks,  have 
90,000  depositors  and  over  7,000  mortgages.  The  differ- 
ence between  the  income  of  those  banks  on  their  invest- 
ments and  the  amount  which  they  pay  to  their  depositors 
is  just  about  one  half  of  one  per  cent.  Out  of  that  has  to 
come  the  expense  of  running  the  banks.  If  you  make  this 
assessment,  if  this  law  becomes  effective,  you  can  readily 
see  that,  as  these  gentlemen  who  have  preceded  me  have 
said,  one  of  two  things  must  follow:  either  the  rate  of 
interest  on  mortgages  must  be  increased,  or  the  rate  of 
interest  paid  to  depositors  must  be  decreased. 


CHAPTER  XI 


Eleventh  Annual  Convention — Amendment  of  the  Constitution 
Concerning  the  Composition  of  the  Executive  Committee — 
The  Taxation  of  Savings  Banks,  by  Wm.  H.  S.  Wood,  of  the 
Bowery  Savings  Bank,  New  York — Letter  from  John  Harsen 
Rhodes — Vote  of  Thanks  Tendered  Him  for  His  Untiring  Ef- 
forts as  a  Member  of  the  Association — Addresses  by  Hon. 
Stewart  L.  Woodford,  Charles  A.  Conant,  Wm.  H.  S.  Wood — 
Letter  from  Charles  A.  Miller,  of  Utica,  Suggesting  Further 
Perfecting  of  the  Organization. 


IN    OPENING    the    Eleventh    Annual    Convention 
of  the  Savings  Banks  Association  which  was  held  on 
May  12,  1904,  President  Charles  A.  Schieren  spoke 
as  follows: 

I  esteem  it  an  honor  and  pleasure  to  bid  you  wel- 
come to  this,  the  eleventh  anniversary  of  our  Asso- 
ciation, and  beg  to  present  to  you  a  brief  review 
of  the  history  of  the  past  eventful  year  and  draw 
your  attention  to  some  important  matters  which  trans- 
pired. 

This  year's  business  of  the  Savings  Banks  of  the  State 
has  been  somewhat  peculiar;  while  the  report  shows  a 
growth  over  last  year,  still  it  falls  short  of  the  year  1902. 
According  to  the  annual  report  of  Superintendent  Kilbum 
the  total  amount  deposited  was  larger  by  $9,270,094,000 
than  ever  before  in  any  one  year.  But  the  withdrawals 
were  larger  than  the  previous  year,  caused  largely  by  the 
state  of  the  financial  market  during  the  greater  part  of 
1903,  as  well  as  the  industrial  and  labor  conditions  gen- 
erally. 

304 


HISTORY  OF  THE  SAVINGS  BANKS  ASSOCIATION  305 

Superintendent   Kilburn's   report   for   the   year    1903 
shows  as  follows: 


Total  resources 
Amount  due  depositors  . 
Surplus  (market  value) 
Surplus  (par  value)    . 
Number  of  open  accounts 
Deposited  during  year    . 
(not  including  interest) 


Increase  over  igo2 

$1,238,800,468      $47,469,895 

1,131,281,943  53,898,200 

107,049,076  6,327,699 

77,595,753    4,865,872 
2,365,922      90,539 

305,934,718    9,270,094 

Excess  over  1902 


Withdrawals  during  year     .      .      .  288,864,705       22,314,593 

On  the  whole  the  report  is  highly  gratifying,  especially 
the  large  increase  of  depositors  by  over  90,000  for  the  year 
1903.  It  is  the  best  evidence  that  the  Savings  Banks 
enjoy  the  confidence  of  the  thrifty  people  of  the  State. 
There  seems  to  be  a  disposition  on  the  part  of  some  trust 
companies,  state  banks,  department  stores,  and  other 
institutions  to  open  savings  departments  in  connection 
with  their  regular  business,  offering  in  several  instances 
higher  rates  of  interest  as  an  inducement  for  the  people 
to  deposit  their  savings  with  them.  The  new  departure 
was  largely  encouraged  by  the  introduction  of  the  pat- 
ented small  steel  savings  banks  or  boxes  to  be  distributed 
through  families  for  children  to  save  their  pennies  and 
bring  the  boxes  when  filled  to  the  bank.  The  experiment 
has  not  proved  successful,  and  several  institutions  have 
abandoned  the  box  system.  The  Savings  Banks  did  not 
seem  to  favor  the  idea  and  considered  it  rather  a  novelty 
soon  to  wear  off,  bemg  fostered  principally  by  the  pat- 
entee and  manufacturer  of  these  steel  boxes;  therefore 
the  Savings  Banks  declined  to  adopt  them.  Some  financial 
institutions  still  endeavor  to  make  their  savings  depart- 
ment a  paying  investment,  but  up  to  date  none  of  them 
has  received  much  encouragement  from  the  public  at 
large.  The  people  seem  to  understand  and  appreciate 
the  great  value  of  our  Savings  Banks  and  have  absolute 
confidence  in  their  security  and  are  not  so  easily  led  away, 
but  are  slow  to  deposit  their  savings  with  other  than  the 


3o6  HISTORY  OF  THE  SAVINGS  BANKS 

regular  Savings  Banks,  which  are  under  the  control  and 
supervision  of  our  Superintendent  of  the  State  Banking 
Department. 

It  is  now  universally  recognized  that  the  only  sound 
and  safe  policy  for  Savings  Banks  is  that  which  has  been 
established  in  our  State,  namely,  keeping  Savings  Banks 
apart  from  general  banking  institutions  and  having  them 
strictly  comply  with  the  law  prescribing  the  use  of  the 
money  deposited.  It  is  only  a  question  of  time  when 
financial  institutions  will  ascertain  that  their  savings 
department  is  not  a  paying  investment  but  rather  a 
detriment  to  their  general  banking.  The  Superintendent 
also  draws  special  attention  to  our  exceedingly  important 
recommendation  in  reference  to  the  extension  of  railway 
bonds  for  proper  investments  for  Savings  Banks  and  cau- 
tions us  to  proceed  slowly.  This  is  a  most  opportune 
and  timely  warning,  therefore  I  quote  the  following  par- 
agraph of  Mr.  Kilburn's  report.     He  says: 

"It  cannot  be  urged  too  strongly  that  the  quality  of 
investments  legaUzed  to  the  Savings  Banks  be  main- 
tained at  the  highest  practicable  standard.  Seven  years 
ago  these  institutions  counted  among  their  bonds  $iii,- 
000,000  of  United  States  consols.  To-day  they  hold  of 
this  particular  class  of  securities  less  than  $19,000,000, 
and  in  the  same  period  they  have  increased  their  owner- 
ship of  railway  bonds  from  nothing  to  $177,000,000.  So 
far  as  the  change  has  gone,  I  am  disposed  to  regard  it  as  a 
wise  one.  The  railway  bonds  that  the  law  authorizes 
are  in  the  main  the  best  that  could  have  been  chosen  from 
this  class  of  securities,  and  are  in  all  probability  safe. 
But  scrupulous  care  should  be  had  not  to  extend  the  list 
unduly,  nor  to  permit  to  be  added  to  it  any  bonds  of  an 
inferior  character.  The  underlying  security  for  a  Savings 
Bank  bond  ought  to  be  not  only  ample  and  absolute,  but 
the  character  of  the  corporation  that  floats  it  should  be 
of  the  highest.  The  mere  fact  that  a  corporation  wants  a 
market  for  its  securities  should  have  no  weight  what- 
ever in  the  matter." 


WILLIAM   BAYARD   VAN   RENSSELAER 


PRESmENT,  I9O4-07 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    307 
REPORT   OF   THE  EXECUTIVE   COMMITTEE 

Mr.  W.  B.  Van  Rensselaer,  President  of  the  Albany  Sav- 
ings Bank,  read  the  report  of  the  Executive  Committee: 

The  Banking  Law  of  this  State  provides  that :  *  *  Not  more 
than  twenty-five  per  centum  of  the  deposits  of  any  bank 
shall  be  loaned  or  invested  in  raUroad  bonds."  The 
questions  were  whether  or  not  the  deposits  of  a  bank 
included  the  surplus,  and  in  regard  to  the  valuation  to  be 
put  on  railroad  bonds  owned  by  Savings  Banks, i.  e., 
should  these  bonds  be  valued  at  their  cost  price,  at  their 
market  price,  or  at  par?  In  order  that  the  banks  might 
act  uniformly  in  their  annual  reports  to  be  filed  with  the 
State  Comptroller  by  August  ist,  the  matter  was  re- 
ferred to  our  counsel  for  his  opinion,  and  the  Secretary 
was  instructed  to  send  such  opinion  to  all  the  members  of 
the  Association.  Mr.  Wickersham,  our  counsel,  subse- 
quently advised  that  a  Savings  Bank  might  invest  twenty- 
five  per  centum  of  the  deposits  and  surplus  in  railroad 
bonds  at  their  cost  value.  Mr.  Kilburn,  the  Superintend- 
ent of  Banks,  later  ruled  that  a  Savings  Bank  should  only 
invest  twenty-five  per  centum  of  its  deposits  in  railroad 
bonds  at  their  cost  price.  The  counsels  of  some  of  our 
banks  think  the  market  value  of  the  bonds  should  be 
taken.  As  this  matter  is  of  importance  to  many  of  the 
Savings  Banks,  it  would  seem  wise  for  our  counsel  to  ar- 
range with  the  Attorney- General  for  a  test  case  for  the 
courts  to  decide.^ 

The  Court  of  Appeals  has  recently  decided  the  test  case 
in  regard  to  the  way  Savings  Banks  should  make  up  their 
surplus  in  their  report  to  the  Comptroller  for  the  purpose 
of  taxation.  The  court  decides  that  all  securities  whose 
market  value  is  above  par  should  be  placed  at  par,  and 
that  all  securities  whose  market  value  is  less  than  par 
should  be  placed  at  their  market  value;  that  banking 
buildings  and  other  real  estate  owned  by  the  banks  should 

1  See  New  Banking  Law,  chap.  2  Consol.  Laws,  amended  by  chap.  369  Laws  of 
1914  (subd.  7  i),  article  6,  section  239. 


3o8  HISTORY  OF  THE  SAVINGS  BANKS 

be  assessed  at  their  present  market  value,  not  at  their 
cost  value ;  that  the  accrued  interest  not  due  should  be  in- 
cluded in  the  assets,  and  that  the  interest  due  depositors 
not  yet  paid  should  be  included  in  the  liabilities. 

At  a  meeting  of  the  Executive  Committee,  held  Jan- 
uary 29,  1904,  the  proposed  issue  of  $163,000,000  bonds 
for  the  Chicago,  Rock  Island  &  Pacific  Railway  Company 
was  discussed,  and  it  was  shown  that  under  the  terms  of 
the  present  law  these  bonds  would  probably  be  legal  in- 
vestments for  Savings  Banks.  It  was  resolved  that  an 
attempt  be  made  to  get  the  Legislature  to  modify  the 
general SavingsBank  Act  so  as  toexclude  this  unusual  issue 
of  bonds  of  the  Chicago,  Rock  Island  &  Pacific  Railway 
Company.  A  bill  was  prepared  to  amend  paragraph 
''C,"  Subdivision  "6,"  Section  "116,"  of  the  Laws  of 
1892,  entitled  "An  Act  Relating  to  Banking  Corpora- 
tions," limiting  the  investments  for  Savings  Banks  of  the 
Chicago,  Rock  Island  &  Pacific  Railway  Company  to  its 
first  mortgage,  sLx  per  cent,  bonds,  due  July,  191 7,  and 
this  request  was  granted,  and  a  hearing  was  given  to  the 
officials  of  the  Chicago,  Rock  Island  &  Pacific  Railroad 
Company  on  the  nth  day  of  March,  1904.  After  listening 
to  the  argument  on  the  subject  it  was  resolved  that  it 
would  be  unwise  to  allow  these  bonds  to  be  made  Savings 
Bank  investments,  and  at  our  request  a  joint  hearing 
of  the  Committee  on  Banks  in  the  Senate  and  Assembly 
was  held  on  the  i6th  day  of  March,  and  a  short  time 
afterward  the  Senate  Committee  on  Banks  reported  our 
bill  favorably  and  it  passed  the  Senate  with  only  three 
negative  votes.  The  matter,  however,  was  delayed  in  the 
Assembly  until  the  last  few  days  of  the  session,  when  the 
Committee  on  Rules  take  charge  and  make  up  the  calendar 
of  all  bills  that  are  to  be  acted  upon  the  Assembly. 

The  Executive  Committee  understands  the  facts  in 
regard  to  the  Chicago,  Rock  Island  &  Pacific  Railway 
Company  to  be  as  follows:  The  company  has  a  capital 
stock  of  $75,000,000,  on  which  dividends  are  being  paid  at 
the  rate  of  four  per  cent,  per  annum.     Its  bonded  in- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    309 

debtedness  consists  of  this  new  issue  of  $163,000,000,  due 
April,  1934.  This  issue  will  eventually  retire  the  outstand- 
ing issues,  except  $60,581,000  fours,  due  July  i,  1988,  and 
about  $11,000,000  Burlington,  Cedar  Rapids  &  Northern 
Railway  Consolidated  fives,  due  April,  1934.  (As  the 
Burlington,  Cedar  Rapids  &  Northern  Railway  Company, 
has  been  merged  into  the  Chicago,  Rock  Island  &  Pacific 
Railway  Company,  these  bonds  become  the  obligation 
of  the  latter  road.)  So  that  when  all  the  new  issue  of 
$163,000,000  is  sold,  the  bonded  indebtedness  of  the 
Chicago,  Rock  Island  &  Pacific  Railway  Company  will 
be  $234,581,000,  or  more  than  three  times  the  amount 
of  its  capital  stock,  and  these  bonds  then  will  be  illegal 
for  Savings  Bank  investment. 

The  opinion  of  our  counsel  was  asked  if  this  condition 
of  affairs  would  make  the  Chicago,  Rock  Island  &  Pacific 
Railway  Bonds  illegal,  and  Mr.  Wickersham  looked  up  the 
matter  and  wrote  an  opinion  to  the  effect  that  the  statute 
means  that  at  the  time  of  the  investment  in  any  of  the 
bonds  of  this  company  the  capital  stock  shaU  then  equal 
or  exceed  one  third  of  the  par  value  of  all  the  bonded  in- 
debtedness of  the  company  outstanding  at  the  moment  of 
such  investment.  This  opinion  was  handed  to  Mr.  Kil- 
burn,  to  see  whether  the  Bank  Department  would  con- 
sider it  in  the  same  way,  and  in  reply  Mr.  Elilburn  writes : 

"  I  have  gone  over  this  opinion  very  carefully,  and  while 
it  seems  very  presumptuous  in  me  to  differ  with  Mr. 
Wickersham  in  any  legal  opinion  which  he  might  write,  and 
while  in  this  particular  case  it  would  make  no  difference, 
I  must,  nevertheless,  dissent  from  the  proposition  that  the 
outstanding  bonded  indebtedness  of  a  railroad  company 
at  the  time  a  bank  purchases  bonds  should  only  be  taken 
into  consideration,  if  indeed  this  is  what  Mr.  Wickersham 
means.  My  opinion  is  that  all  the  bonds,  which  may 
be  issued  under  a  mortgage,  should  be  taken  into  con- 
sideration in  comparison  with  the  bonded  indebtedness 
and  the  amount  of  capital  stock  outstanding." 

In  view  of  these  conflicting  opinions,  it  may  be  wise 


3IO  HISTORY  OF  THE  SAVINGS  BANKS 

to  have  a  test  case  prepared  to  submit  to  the  courts  for  a 
final  settlement  of  this  matter.  Under  all  the  circum- 
stances your  Executive  Committee  would  recommend 
that  the  Association  pass  a  resolution,  that  in  its  judg- 
ment it  would  be  unwise  for  any  Savings  Bank  in  this 
State  to  purchase  bonds  of  this  proposed  issue  of  the 
Chicago,  Rock  Island  &  Pacific  Railway  Company.  In 
this  connection  the  Executive  Committee  is  under  great 
obligations  to  Senator  McEwan,  who  took  charge  of  the 
matter  in  the  Senate,  and  to  Assembljonan  Agnew,  who 
took  charge  in  the  Assembly,  and  to  Assemblyman  J.  T. 
Smith,  Chairman  of  the  Committee  on  Banks,  for  their 
untiring  efforts  in  assisting  your  Committee,  not  only  in 
this  measure  but  in  all  legislation  pertaining  to  Savings 
Banks  interest.  This  Committee  is  also  indebted  to 
Bank  Superintendent  Kilburn,  who  has  cooperated  with 
us  all  in  all  legislative  matters,  and  at  our  request  has 
often  appeared  before  the  Committee  of  the  Legislature, 
advocating  our  side  of  the  various  questions. 

The  Executive  Committee  recommended  the  adoption 
of  the  following  resolution : 

Resolved,  That  it  is  the  judgment  of  this  Association 
that  it  would  be  unwise  for  any  Savings  Bank  in  this 
State  to  purchase  bonds  of  the  proposed  issue  of  $163,- 
000,000  of  the  Chicago,  Rock  Island  &  Pacific  Railway 
Company. 

SCHOOL   SAVINGS   BANKS   AUTHORIZED 

The  Legislature  has  passed  an  act  to  amend  the  Bank- 
ing Laws  for  the  purpose  of  authorizing  the  organization 
of  School  Savings  Banks  in  the  public  schools  of  this 
State. 

This  bill  authorizes  the  superintendent  of  public  schools 
to  collect  from  time  to  time  small  amounts  of  savings 
from  pupils,  and  to  deposit  the  same  in  some  Savings 
Bank  in  this  State  to  the  credit  of  the  pupils  or  to 
his  credit  in  trust  for  his  pupils,  furnishing  the  bank  with 
lists  of  the  names,  amounts,  signatures,  etc.,  of  the  pupils 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    311 

from  whom  he  has  received  the  same.  It  also  authorizes 
the  use  of  the  words,  "School  Savings  Banks"  or  "Sys- 
tem of  School  Savings  Banks, "in  circulars,  reports,  or  other 
printed  matter  used  in  connection  with  the  purposes  of 
this  law. 

ADDRESS    OF   HON.    F.    D.    KILBURN 

Mr.  Frederic  D.  Kilburn,  Superintendent  of  the  Banking 
Department,  in  addressing  the  Convention,  said: 

I  have  always  been  impressed  with  the  vast  importance 
of  the  Savings  Banks  of  this  State,  and  I  never  tire  of 
going  over  their  reports  and  massing  the  figures  which 
indicate  the  vastness  of  your  investments  and  the  enor- 
mous amount  of  money  which  you  have  under  your  con- 
trol. The  very  statement  that  you  have  got  over  a  bill- 
ion dollars  in  your  banks  is  sufficient  to  indicate  the 
enormous  influence  which  the  Savings  Banks  of  this  State 
must  necessarily  exert,  and  the  vast  importance  of  your 
institutions. 

And  then,  when  you  consider  that  you  have  got  over 
one  billion  dollars  deposit,  about  one  hundred  and 
seven  million  dollars  on  market  values  of  surplus,  and 
over  seventy-seven  million  dollars  on  par  values;  that 
you  gained  last  year  in  deposits,  aside  from  the  interest 
which  you  credited,  about  seventeen  million  dollars  and, 
including  interest  credited,  about  fifty-four  million  or 
fifty-five  million  dollars,  these  figures,  while  they  are 
somewhat  incomprehensible,  show  better  than  anything 
else,  perhaps,  the  vast  growth  and  influence  which  the 
Savings  Banks  of  this  State  must  necessarily  exert  upon 
financial  conditions  in  our  State.  I  do  not  know  whether 
other  States  have  an  organization  of  this  kind,  but  I  do 
know  that,  since  your  organization  was  effected,  your 
influence  in  the  State  has  proportionately  grown,  and  that 
a  uniform  system  of  conservatism  has  grown  up  among 
the  Savings  Banks  of  the  State. 


312  HISTORY  OF  THE  SAVINGS  BANKS 

You  have  been  extremely  fortunate,  gentlemen,  in 
the  selection  of  your  Presidents.  I  can  remember  when 
Mr.  Rhoades  was  organizing  this  institution;  with  others, 
I  believe  that  he  was  the  leading  spirit  at  the  time,  and 
I  remember  the  good  work  he  did.  I  do  not  believe  that 
you, perhaps,  fully  appreciate  whatyou  owe  to  Mr.  Rhoades 
and  to  other  men  who  took  the  active  initiative  in  organ- 
izing this  Association. 

He  was  succeeded  by  Mr.  Mills,  who  devoted  largely 
his  time  and  labor  to  his  duties  as  President  of  this  Asso- 
ciation, and  I  tell  you,  gentlemen,  it  takes  more  time  and 
sometimes  a  great  deal  more  patience  than  you  think 
of  to  do  the  work  of  a  President  of  this  Association. 

And  then,  succeeding  him,  was  Mr .  Schieren,  and  in 
every  one  of  these  three  gentlemen  who  have  presided 
over  your  deliberations,  and  been  your  President,  you 
have  been  extremely  fortunate  in  your  selections.  They 
have  shown,  each  and  every  one  of  them,  marked  unsel- 
fishness in  the  discharge  of  their  duties  and  have  watch- 
fully served  the  interests  of  the  Savings  Banks  of  this 
State. 

A  great  deal  has  been  said  in  Albany  during  the  past 
winter,  and  during  the  years  that  your  organization  has 
been  in  existence,  about  the  constant  addition  of  railroad 
bonds  to  the  list  of  legal  investments  for  Savings  Banks. 
I  tell  you,  gentlemen,  and  I  wish  to  sound  a  note  of  warn- 
ing, in  my  opinion  the  time  has  come  when  a  halt  should 
be  called. 

It  may  be  that  there  are  other  railroad  bonds  in  the 
country  which  are  just  as  safe  investments  as  any  which 
are  now  included  in  the  law,  but  if  this  effort  to  constantly 
add  to  the  list  of  these  investments  is  continued,  you  will 
not  only  get  some  good  investments  in  addition,  but  you 
will  get  some  that  are  undesirable;  and,  rather  than  have 
one  undesirable  investment  of  this  kind,  you  had  better 
eliminate  two  or  three  that  are  desirable. 

I  know  that  not  sufficient  attention  is  paid  to  the  de- 
sires of  this  Association  in  Albany  with  reference  to  these 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    313 

investments,  and  you  may  be  sure  that  almost  every  time  a 
bill  is  introduced— unless  it  comes  from  this  Association — 
it  is  introduced  for  some  selfish  motive,  that  is  to  say, 
some  man  who  has  a  railroad  in  his  district,  and  the  offi- 
cers of  which  he  wishes  to  accommodate,  will  introduce  a 
bill,  and  he  will  do  everything  he  can  to  get  that  bill 
through. 

The  fate  of  that  bill,  perhaps,  depends  not  only  upon 
his  own  active,  individual  efforts  but  also  upon  the  other 
ramifications  which  all  legislators  must,  or  at  least  do,  to  a 
greater  or  less  extent,  recognize.  And  so  the  outcome  is, 
and  has  been,  and  will  continue  to  be,  the  letting  in  of 
undesirable  securities  of  this  kind  for  investments  by 
Savings  Banks.  Why  it  is  done  it  is  unnecessary  for  me 
to  suggest,  because  you  all  know  better  than  I  do  that 
there  are  many  classes  of  financial  institutions  in  this 
world  which  should  be  as  conservative  as  the  Savings 
Banks  in  the  investment  of  their  funds. 

You  are  acting  in  a  fiduciary  capacity.  You  have  no 
right,  from  any  standpoint,  if  you  can  help  it,  to  invest  the 
funds  committed  to  your  care  in  anything  about  which 
there  is  the  least  question,  so  far  as  human  ingenuity 
can  detect. 

I  do  not  believe  that  any  bill  can  pass  the  Legislature 
if  there  is  a  united  opposition  to  it  on  the  part  of  this 
Association,  and  if  you  cannot  stop  it  by  the  ordinary 
means  of  persuasion,  then  I  would  stop  it  by  a  resolution, 
such  as  I  understand  you  have  passed  here  to-day.  In 
other  words,  I  would  not  submit,  if  by  any  means  I  could 
help  it,  to  a  bill  being  foisted  upon  the  State  which  will 
permit  the  Savings  Banks  to  invest  in  securities  of  which 
this  Association  does  not  approve.  I  was  asked  by  a 
gentleman  who  represented  you  at  Albany  last  winter 
whether  I  was  in  favor  of  the  Rock  Island  Bill  so-called. 
I  said:  "Yes,  of  course  I  am  in  favor  of  the  bill.  Why 
do  you  ask  the  question?"  He  said:  "It  has  been  re- 
ported that  you  did  not  care  much  whether  the  bill  passed 
or  not."    I  said:  "I  don't  know  what  has  been  reported. 


314       '       HISTORY  OF  THE  SAVINGS  BANKS 

I  have  never  failed  to  improve  every  opportunity  that 
I  have  had  to  announce  myself  as  in  favor  of  that  bill," 
which  meant  the  exclusion  of  certain  bonds  issued  by  the 
Rock  Island  road  from  the  legal  investments  of  the  Sav- 
ings Banks  of  this  State.  The  argument  had  been  closed 
and  ever>'body  but  the  Committee  had  left.  I  asked 
them  if  a  statement  of  that  kind  had  been  made,  and  they 
said  it  had.  I  asked  if  it  was  necessary  for  me  to  tell 
them  again  that  I  was  in  favor  of  this  bill,  and  they  said : 
"  It  is  not.  We  know  your  position  very  well  because  you 
have  been  here  two  or  three  times  to  tell  us  that  you  think 
the  bill  ought  to  pass,  and  have  given  your  reasons  why." 

I  do  not  know  just  why  I  was  misrepresented  upon  this 
occasion  unless  it  was  that  perhaps  they  thought  my 
ideas  about  it  would  have  some  influence  upon  the  Com- 
mittee. So  you  see,  gentlemen,  to  what  desperate  ends  these 
men,  who  are  in  favor  of  a  bill  which  will  admit  certain 
bonds  as  legal  investments  or  who  oppose  a  bill  of  that 
kind  that  I  have  mentioned,  will  go  in  order  to  compass 
their  desires.  I  do  not  blame  you  for  doing  just  what 
you  have  done  here  to-day;  on  the  contrary,  I  told  Mr. 
Van  Rensselaer,  or  Mr.  Rhoades,  I  would  pass  just  such 
a  resolution  as  I  understand  you  have  passed  here  to-day. 

Since  this  matter  has  come  up  I  have  been  thinking 
about  what  might  be  best  to  do  next  winter  in  regard  to 
investments  of  this  kind.  I  believe  that  a  law  should  be 
passed  in  the  Legislature  which  would  do  this.  Make 
every  railroad  bond  a  non-legal  investment,  or,  in  other 
words,  that  every  railroad  bond,  before  it  becomes  a  legal 
investment,  must  be  approved  by  this  Association,  and 
that  approval  put  in  writing  and  hied  in  the  Banking 
Department  at  Albany.  And  not  until  that  is  done  shall 
any  railroad  bond  become  a  legal  investment  for  the 
Savings  Banks  of  this  State. 

I  do  not  think  that  that  law  would  be  unconstitutional, 
because  I  know  that  some  laws  have  been  passed  with  an 
analogous  condition  or  provision  in  them.  Your  counsel 
can  tell  better  about  the  constitutional  question  concern- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    315 

ing  such  a  law  than  I  can,  but  it  seems  to  me  that  such  a 
law  will  pass.  I  do  not  believe  that  the  Legislature  of  the 
State  will  hesitate  for  a  moment  to  put  the  power  into 
the  hands  of  the  men  who  are  more  interested  than  any 
body  of  men  in  the  State  can  be  in  conserving  the  in- 
terests of  its  citizens,  to  say  what  shall  or  shall  not  be- 
come legal  investments  for  the  banks. 

It  seems  to  me  that  you  can  pass  that  bill.  Then  you 
will  have  the  control  of  this  subject  and  will  not  be  troub- 
led from  year  to  year  with  any  bills  seeking  to  make  the 
securities  of  every  little  railroad  anywhere  in  the  State, 
or  out  of  the  State,  legal  investments  for  the  Savings 
Banks  of  this  State. 

I  beUeve,  gentlemen,  that  this  is  very  important,  and,  if 
it  is  constitutional,  I  would  try  and  pass  it.  I  believe 
you  can  do  it,  and  I  believe  that  that  will  solve  the  prob- 
lem and  cut  the  Gordian  knot. 

I  thank  you,  gentlemen,  for  your  attention. 

AMENDMENT  TO    THE   CONSTITUTION 

An  amendment  of  the  Constitution  of  the  Association 
was  proposed  and  adopted,  as  follows: 

"For  the  purpose  of  retaining  the  services  of  the  ex- 
presidents  who,  by  reason  of  their  past  experience,  are 
enabled  to  do  good  work  for  the  Association,  the  Consti- 
tution be  amended  in  such  a  way  as  to  retain  the  ex-presi- 
dents as  members  ex-qfficio  of  the  Executive  Committee. 
The  by-law  reads.  Article  VI,  that  the  Executive  Com- 
mittee shall  consist  of  nine  members  of  the  Association, 
the  President,  Vice-President,  Secretary,  and  Treasurer 
being  members  ex-officio.  It  is  suggested  that  the  Presi- 
dent, Vice-President,  Secretary,  Treasurer,  and  all  ex-presi- 
dents be  members  of  the  Executive  Committee." 

THE   TAXATION   OF    SAVINGS   BANKS 

Mr.  Wm.  H.  S.  Wood,  President  of  the  Bowery  Savings 
Bank,  New  York  said:  I  know  at  the  time  that  a  Fran- 


3i6  HISTORY  OF  THE  SAVINGS  EANXS 

chise  Tax  Bill  was  before  the  Legislature  at  Albany  there 
was  a  delegation  sent  there  from  this  Association  to  op- 
pose its  passage.  Perhaps,  but  for  one  argument,  they 
might  have  been  successful  in  their  purpose.  I  was  told 
a  fortnight  ago,  by  a  president  of  a  large  institution,  that  a 
leading  member  of  the  Assembly  in  Albany,  who  had  to 
depend  on  this  gentleman  for  his  advice  in  Savings  Bank 
matters,  had  said  to  him:  "Why,  this  is  the  only  State  in 
the  Union  that  has  a  Savings  Bank  law  that  does  not 
derive  a  large  income  from  a  tax  upon  its  Savings  Banks." 
If  I  make  a  statement  that  is  wrong  I  wish  to  be  corrected. 
He  said:  "Why  should  it  be  the  only  State  in  the  Union 
that  does  not  derive  such  an  income?" 

Is  there  another  State  in  the  Union  that  so  limits  the 
securities  for  investment  by  the  Savings  Banks  of  this 
State  as  does  the  State  of  New  York?    Not  one  of  them. 

Take  the  New  England  States.  Go  down  into  Maine 
and  begin  there  and  come  this  way.  Every  one  of  the 
New  England  States  allows  transactions  that  would  not 
be  dreamed  of  for  a  moment  in  the  State  of  New  York. 
There  you  can  lend  your  money,  if  you  please,  on  a  note 
with  an  indorsement  by  a  few  trustees.  You  can  in 
Boston,  in  the  State  of  Massachusetts,  under  the  Massa- 
chusetts State  laws,  buy  the  stock  of  any  bank,  National 
or  State,  or  the  stock  of  any  trust  company  in  the  State 
and  add  it  to  your  securities.  You  can  buy  the  stock  of 
most  of  the  railroad  companies  in  the  State  and  add  them 
to  your  securities. 

Give  the  Savings  Banks  of  the  State  of  New  York  these 
opportunities — mark  you,  we  do  not  want  them — give 
them  these  opportunities,  let  the  Savings  Banks,  if  you 
please,  of  the  City  of  New  York,  have  the  power  to  go  down 
into  Wall  Street  and  purchase  the  stock  of  the  banks  there. 
WTiy,  gentlemen,  we  have  the  money  here  in  our  Savings 
Banks  to  buy  the  stock  of  every  bank  in  the  city;  to  begin 
with,  the  National  City  Bank  and  then  the  First  National 
Bank,  the  Bank  of  Commerce,  the  Corn  Exchange,  in 
fact,  all  we  want.     We  could  control  them  all.    Wouldn't 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    317 

we  make  money?  Well,  now,  wouldn't  we?  Couldn't 
we  pay  a  small  franchise  tax?  We  wouldn't  say  a  word 
about  it. 

But  you  know  that  the  franchise  tax  to  any  bank  that 
has  anything  of  a  surplus  is  a  serious  burden.  Last  July, 
when  the  condition  of  the  money  market  was  such  that 
most  of  us  remember  how  difficult  it  was  to  obtain  money 
in  Wall  Street,  it  occurred  to  me  that  paying  $68,000  as  a 
franchise  tax  and  getting  nothing  back  was  a  dead 
weight. 

We  raised  the  majority  of  our  real-estate  bonds  and 
mortgages  from  four  to  four  and  a  half  per  cent. ;  almost 
every  one  of  the  banks  of  this  city  was  standing  behind 
our  back  and  the  rate  was  raised. 

The  newspapers  of  the  State,  and  the  newspapers  of 
the  country,  do  not  appear  to  have  the  least  idea  why  it  is 
that  the  Savings  Banks  of  this  State  are  compelling  bor- 
rowers upon  mortgages  to  pay  four  and  a  half  per  cent. 

We  have  to  get  that  $68,000  somewhere,  and  we  are 
going  to  get  it.  But  I  venture  to  say  there  is  not  a  single 
Savings  Bank  in  the  State  of  New  York  that  would  not 
prefer  to  have  the  law  repealed  from  the  statute  books  of 
the  State  and  go  back  to  four  per  cent.  We  would  be 
delighted  to  do  it. 

I  want  to  offer  a  resolution  at  this  time  which  is  di- 
rectly in  connection  with  this  matter.     It  is  as  follows: 

Whereas,  the  Legislature  of  the  State  of  New  York 
did  in  1 90 1  enact  a  law  imposing  upon  the  Savings  Banks 
of  the  State  an  annual  tax,  for  the  privilege  of  exercising 
their  corporate  franchise  or  carrying  on  their  business  in 
such  corporate  or  organized  capacity;  and. 

Whereas,  the  said  so-called  franchise  tax  is,  in  the  judg- 
ment of  this  Association,  an  unwise  and  unjust  imposition 
(wholly  unworthy  of  the  great  State  of  New  York),  not 
only  upon  the  self-sacrificing  men  who  manage  the  savings 
institutions  of  this  State,  without  the  slightest  pecuniary 
advantage  to  themselves,  but  also  upon  a  vast  number  of 
our  citizens,  therefore,  be  it 


3i8  HISTORY  OF  THE  SAVINGS  BANKS 

Resolved,  That  the  President  of  this  Association  be 
requested  to  appoint  a  Committee  at  an  early  date  to 
consider  the  whole  subject  and  to  take  such  action  thereon 
the  ensuing  year,  or,  if  necessary,  annually  thereafter,  until 
the  State  has  been  relieved  from  this  stain  upon  its 
escutcheon,  the  banks  from  an  unrighteous  and  unjust 
tax,  and  the  laboring  and  deserving  poorer  classes  from 
an  added  burden  in  their  struggle  for  independence. 

The  resolution  was  seconded  by  Mr.  Wm.  P.  Sturges, 
President  of  The  Dime  Savings  Bank  of  Williamsburgh, 
and  carried. 

Mr.  William  Bayard  Van  Rensselaer,  President  of  Al- 
bany Savings  Bank,  was  elected  President  of  the  Savings 
Banks  Association  for  the  ensuing  year. 

LETTER  FROM  JOHN  HARSEN  RHOADES 

The  following  was  received  from  John  Harsen  Rhoades, 
and  read  by  Mr.  Schieren: 

Gentlemen :  It  is  a  source  of  regret  to  me  to  be  unable 
to  be  present  at  your  annual  meeting.  Were  it  not  that 
I  am  under  orders  from  my  physician  to  leave  the  cares 
of  business  for  a  season  two  or  three  times  each  year,  I 
certainly  should  remain  over  until  after  your  meeting; 
but  I  am  practically  forced  to  leave  at  an  earlier  date. 

Our  recent  experience  in  connection  with  the  bill  which 
was  introduced  in  the  Legislature  by  the  Executive  Com- 
mittee limiting  the  bond  issues  of  the  Rock  Island  Rail- 
road in  which  Savings  Banks  might  invest  has  led  me  to 
believe  that  this  whole  subject  of  raUroad-bond  investment 
should  be  carefully  considered  by  our  Association  at  its 
annual  meeting,  and  perhaps  more  thoroughly  understood 
by  all  than  is  now  the  case ;  and  as  I  have  by  your  courtesy 
been  in  the  position  of  formulating  with  my  associates 
the  various  laws  relating  to  raUroad-bond  investment,  I 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    319 

have  thought  it  well  to  review  briefly  the  entire  subject 
for  your  information. 

Time  passes  and  we  forget  things  quickly;  but  it  is  now 
some  twenty  odd  years  since  a  small  number  of  officers 
of  Savings  Banks,  located  mainly  in  New  York  and  Brook- 
lyn, interested  themselves  in  an  endeavor  to  extend  the 
scope  of  Savings  Banks  investment.  We  were  determined 
that,  if  any  relief  was  obtained,  it  should  be  obtained 
honestly,  and  that  not  a  dollar  should  be  spent  in  the 
lobby  or  in  any  way  to  secure  the  legislation  desired. 
Such  not  only  was  the  course  of  the  gentlemen  then  asso- 
ciated together,  but  such  has  been  the  course  of  your  Ex- 
ecutive Committee  ever  since  the  foundation  of  this 
Association.  The  result  has  been  that  no  legislation  in 
which  investments  of  any  kind  were  involved  has  ever 
been  created  directly  through  the  action  of  Savings  Bank 
officers.  The  experience  of  the  past  has  shown  conclu- 
sively that  such  legislation  is  obtained  only  by  influence 
or  by  methods  which  are  reprehensible. 

Now  as  to  the  need  of  an  extension  in  the  scope  of 
investments.  In  those  early  days  it  was  felt  by  all  of  us 
who  were  engaged  in  the  work  which  I  have  outlined,  that 
the  Government  debt  was  not  only  decreasing  but  that 
such  decrease  would  go  on  steadily  until  these  bonds  of 
the  Government  were  no  longer  available  for  Savings 
Bank  investment.  The  volume  of  deposits  was  rapidly 
increasing;  the  debts  of  the  states  were  decreasing,  and 
there  was  nothing  available  in  any  volume  in  the  list  of 
investments  save  bonds  and  mortgages  and  municipal 
securities  in  the  State.  As  the  deposits  increased  and  the 
field  narrowed,  competition  drove  the  prices  of  all  such 
securities  as  we  could  buy  to  an  abnormally  high  figure, 
returning  an  annual  interest  rate  much  lower  than  the 
ordinary  individual  could  obtain,  and  working  what  we 
deemed  to  be  a  gross  injustice  to  the  laboring  people  of 
the  country  whose  interests  we  were  endeavoring  to  serve. 
Finally  we  did  succeed  (by  obtaining  the  assistance  of 
banking  houses  who  wished  to  have  included  certain 


320  HISTORY  OF  THE  SAVINGS  BANKS 

State  bonds)  in  securing  the  privilege  of  investing  in  the 
bonds  of  certain  municipalities  to  be  named ;  and  this  was 
of  some  help,  but  not  enough.  In  the  meantime,  the 
Savings  Banks  Association  had  been  formed,  because  it 
was  believed  that  we  must  work  as  a  unit  for  the  protection 
of  Savings  Bank  interests,  or  the  Savings  Bank  system 
would  eventually  be  broken  down  and  its  purpose  frus- 
trated through  the  influence  of  those  having  selfish  ends 
to  serve. 

The  need  for  further  legislation  was  evident,  and  the 
great  problem  to  solve  was  what  class  of  securities  we 
should  advocate  as  being  a  safe  investment  for  Savings 
Bank  funds.  We  naturally  turned  to  the  question  of 
railroad  bonds.  It  seemed  to  us  that  the  underlying 
bonds  of  the  best  railroads  in  the  country  formed  a  secur- 
ity of  the  first  class  in  every  way.  They  give  a  wide 
market  both  for  purchase  and  sale.  They  were  well 
known  not  only  in  the  financial  markets  of  this  country, 
but  in  the  financial  markets  of  the  countries  of  Europe, 
and,  in  times  of  stress  or  emergency  or  panic,  they  possessed 
a  quality  which  would  enable  us  either  to  sell  or  borrow 
money  not  only  in  our  own  markets  but  in  the  markets  of 
Europe.  In  fact,  they  would  take  the  place  of  United 
States  Government  bonds,  which  we  practically  could  no 
longer  buy. 

The  next  question  arose  as  to  how  we  should  draw  the 
line  as  between  good  and  bad  securities,  and  what  restric- 
tions we  could  properly  put  around  the  issues  in  which  we 
might  invest,  which  would  thoroughly  protect  our  de- 
positors. Naturally  the  solution  of  the  problem  would 
lie  in  the  direction  of  specifically  naming  the  bonds  we 
could  buy;  that  is  to  say,  defining  the  particular  issue  of 
each  road;  but  it  was  quickly  realized  that  the  list  w^ould 
be  so  long  in  detail  as  to  preclude  any  possibility  of  its 
receiving  the  approval  of  the  Legislature  of  the  State, 
these  officials  naturally  thinking  that  the  list  of  securities 
was  altogether  too  long  and  too  broad.  Consequently, 
we  had  to  confine  ourselves  to  naming  railroads,  and  nam- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    321 

ing  general  terms  as  to  the  issues  in  which  we  could  make 
investments.  Our  definitions  have  proved  sound  and 
correct  in  every  direction  but  one.  The  law  provides, 
among  other  restrictions,  that  the  bond  in  which  we  may 
invest  must  be  a  first  mortgage  upon  the  whole  or  a  part 
of  the  railroad  mortgaged.  It  was  recognized  that  this 
might  be  taken  advantage  of  by  an  unscrupulous  man- 
agement, and  bonds  be  thrust  into  the  list  of  Savings 
Bank  investment  which  would  be  highly  improper  issues 
for  a  trust  of  the  character  we  represented;  but  as  the 
great  railroad  combinations  of  the  country  had  been  made 
up  of  small  sections  from  time  to  time,  finally  merging 
themselves  into  a  vast  system,  it  was  found  extremely 
difficult  to  define  the  extent  of  this  first  mortgage  without 
danger  of  throwing  out  some  of  the  very  best  securities 
which  it  was  to  our  interest  to  purchase,  and  we  con- 
cluded to  make  the  experiment  as  it  now  stands. 

Our  experience  has  shown,  however,  in  the  case  of  the 
recent  Rock  Island  issues,  that  the  clause  in  the  law  is 
dangerous,  and  must  in  some  way  be  amended.  What 
has  occurred  in  the  case  of  the  Rock  Island  Company 
might  occur  at  any  time  with  some  one  of  the  large  rail- 
road corporations  whose  bonds  now  rank  with  the  very 
best  in  the  market,  and  this  danger  is  so  great  that  it  is 
not  wise  to  allow  it  to  continue.  As  for  myself  personally, 
I  am  and  always  have  been  a  great  believer  in  railroad 
bond  investments  of  a  proper  quality  for  Savings  Bank 
funds.  I  believe  it  is  one  which  is  available  for  sale  with- 
out considerable  loss  in  times  of  panic  and  financial  dis- 
tress. In  fact,  I  am  thoroughly  in  favor  of  increasing 
the  list  of  bonds  in  which  Savings  Banks  may  invest  just 
so  far  as  issues  can  be  secured  which  are  first  class  in 
every  respect.  I  think  we  will  all  agree  that  what  has 
already  been  accomplished  through  the  widening  of  the 
scope  of  investments  has  been  of  great  advantage  to  our 
depositors,  enabling  us  to  maintain  a  rate  of  interest 
which  would  otherwise  have  been  impossible  to  maintain, 
and  giving  us  a  broad  market  from  which  to  draw  our 


322  HISTORY  OF  THE  SAVINGS  BANKS 

investments  (and  the  broader  you  make  such  a  market, 
as  long  as  you  keep  within  the  bounds  of  safety,  the  better 
return  can  you  give  to  your  depositors,  with  ample  se- 
curity at  the  back  of  it).  We  all  remember  the  time 
when  we  were  so  restricted  that  we  were  glad  to  buy 
State  and  municipal  bonds  at  a  rate  equivalent  to  an 
annual  return  of  two  and  three  fourths  per  cent. 

Now  what  is  the  danger?  Simply  this,  that  banking 
houses  having  secured  the  control  of  a  new  issue  of  bonds, 
and  thinking  that  they  can  make  a  better  profit  if  the 
bonds  are  created  a  Savings  Bank  issue,  go  to  the  Legisla- 
ture and  succeed,  in  spite  of  the  protest  of  our  Association, 
in  passing  their  bills  and  having  them  signed  by  the 
Governor.  This  has  been  repeatedly  done  in  the  past, 
and  it  will  probably  continue  to  be  done  in  the  future. 
What,  if  any,  is  our  protection  against  this  condition?  I 
am  free  to  say  we  have  none,  with  one  exception — and 
that  is  available  to  the  banks.  It  is  this:  if  an  issue  of 
bonds  is  forced  through  the  Legislature  at  any  time  in 
spite  of  the  protest  of  the  Association  as  represented  by 
its  Executive  Committee,  then  notice  of  the  reasons  for 
the  objections  made  should  be  sent  to  every  bank  in  the 
State,  and  every  bank  in  the  State  should  decide  that 
under  no  circumstances  would  it  avail  itself  of  the  privi- 
lege of  purchasing  bonds  made  available  in  opposition 
to  the  will  of  the  officers  of  banks,  whose  only  object  in 
opposing  was  to  protect  the  sacred  trust  which  has  been 
committed  to  their  care.  If  this  spirit  could  pervade 
the  entire  Association,  it  would  not  take  long  for  parties 
interested  in  forcing  inferior  issues  of  bonds  upon  the 
banks  to  learn  that  the  trouble  and  expense  of  making 
such  issues  Savings  Bank  investments  were  greater  than 
any  possible  return  from  selling  the  securities  to  the  banks 
at  higher  than  their  normal  value. 

I  sincerely  hope  that  this  subject  will  receive  your  care- 
ful attention  at  this  meeting  of  the  Association,  and  be 
thoroughly  debated  with  the  idea  of  arriving  at  a  consensus 
of  opinion  as  to  the  desirability  of  increasing  the  line  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    323 

railroad  investments,  and  as  to  what  additional  safe- 
guards the  Association  thinks  should  be  thrown  around 
all  issues  of  this  character.  The  deposits  in  the  Savings 
Banks  to-day  amount  to  eleven  hundred  millions  of  dol- 
lars, and  I  can  see  no  reason  why,  in  the  course  of  com- 
paratively few  years,  this  should  not  reach  two  thousand 
millions;  therefore  the  question  of  investment  is  a  very 
serious  and  far-reaching  question,  and  should  be  consid- 
ered upon  broad  lines  and  with  a  broad  outlook. 

Whatever  may  be  the  outcome  of  your  discussions, 
I  sincerely  hope  you  will  at  least  pass  two  resolutions — one 
directing  your  Executive  Conmiittee  to  reintroduce  at 
the  next  session  of  the  Legislature  a  bill  restricting  the 
bonds  of  the  Rock  Island  Railroad  in  which  the  Savings 
Banks  may  invest;  and  the  other  directing  the  Executive 
Committee,  at  the  hands  of  competent  counsel,  to  remedy 
the  defects  now  existing  in  the  law  so  far  as  the  clause  read- 
ing: "secured  by  a  mortgage  which  is  a  first  mortgage  on 
either  the  whole  or  some  part  of  the  railroad  and  railroad 
property  of  the  company  issuing  such  bonds  "  is  concerned. 

You  will  pardon  me,  gentlemen,  for  presuming  as  I 
have  done  upon  your  time  and  patience  in  asking  you  to 
listen  to  this  long  letter;  but  I  have  been  associated  with 
you  so  long,  and  have  striven  so  zealously  for  the  building 
up  and  perpetuation  of  our  Savings  Bank  system  (which  I 
think  is  the  best  of  any  State  in  the  Union,  with  possibly  the 
exception  of  the  State  of  Massachusetts,  and  which  I  believe, 
if  kept  in  purity,  is  a  model  for  adoption  by  all  the  States, 
fully  solving  the  question  as  to  what  is  the  best  method 
to  gather  in  and  conserve  the  thrift  of  the  people)  that  I 
feel  almost  sure  you  will  forgive  the  liberties  I  have  taken. 

I  have  the  honor  to  remain, 

Very  respectfully  yours, 

John  Harsen  Rhoades. 

Mr.  Schieren  offered  a  vote  of  thanks  to  Mr.  Rhoades 
for  his  untiring  efforts  and  valuable  service  rendered  to  the 
Association  in  expressing  the  true  situation  of  the  new 


324  HISTORY  OF  THE  SAVINGS  BANKS 

issue  of  the  Rock  Island  &  Pacific  Railroad  bonds.     This 
was  seconded,  and  carried. 

Mr.  Schieren:  Mr.  President,  I  hope  I  may  be  par- 
doned for  saying  a  few  words.  There  is  perhaps  no  one 
who  appreciates  more  what  Mr.  J.  Harsen  Rhoades  has 
done  during  the  past  few  years  for  your  Association  than 
your  late  President.  He  was  untiring  in  everything 
that  he  could  possibly  do  or  say  for  the  interests  of  the  Sav- 
ings Banks  and  their  depositors.  He  is  a  most  gifted  man. 
I  am  sorry  that  he  cannot  be  with  us  to-day,  but  I  believe 
that  I  voice  the  sentiments  of  this  entire  audience  when  I 
suggest  that  a  vote  of  thanks  be  tendered  to  Mr.  Rhoades 
for  his  untiring  efforts  and  invaluable  services  rendered  the 
Association  in  exposing  the  true  inwardness  of  the  situation 
regarding  the  Rock  Island  Railroad  bond  investment. 

A  vote  of  thanks  was  unanimously  tendered  to  Mr. 
Rhoades. 

ADDRESS   OF   HON.    STEWART   L.   WOODFORD 

Mr.  President  and  Gentlemen  of  the  New  York  Sav- 
ings Banks  Association  of  the  State  of  New  York:  It  is 
certainly  a  great  honor  to  be  asked  to  talk  with  you 
to-day.  I  realize  that  in  the  long  practice  of  my  profes- 
sion I  have  had  neither  the  experience  nor  the  training 
to  say  much  that  can  be  of  special  value  to  you.  I  should 
have  declined  the  invitation  at  once,  but  I  realized  and 
appreciated  this  compliment  so  greatly  that  I  yielded  to 
the  request  of  my  friend,  Mr.  Schieren,  and  promised  to 
be  with  you.  I  will  endeavor  to  justify  the  courtesy  and 
the  kindness  of  this  invitation  by  being  very  brief  and 
leaving  you  to  hear  from  those  who  can  address  you  intelli- 
gently and  even  scientifically. 

The  Savings  Banks  of  the  State  of  New  York  hold  to- 
day more  than  one  billion,  two  hundred  thousand  dollars. 
This  immense  total  is  more  than  three  times  the  debt  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    325 

the  Greater  City  of  New  York,  and  it  is  within  about 
one  hundred  million  dollars  of  the  entire  interest  and 
non-interest  bearing  debt  of  the  United  States.  In  other 
words,  if  the  Savings  Banks  of  the  State  of  New  York 
could  acquire  the  Federal  debt,  they  would  hold  all  the 
interest-bearing  securities  and  about  two  thirds  of  the 
greenbacks.  There  is  poetry,  there  is  pathos,  there  is 
thrift,  there  is  tremendous  meaning  in  this  enormous 
aggregate  of  deposits.  The  depositors,  if  you  strike  out 
those  who  hold  duplicate  accounts  with  more  than  one 
institution,  the  individual  or  separate  depositors  certainly 
exceed  two  million  in  number  in  the  State  of  New  York. 
They  equal  nearly  two  thirds  of  the  entire  population  of 
the  thirteen  colonies  when  the  war  with  Great  Britain 
was  undertaken.  They  are  in  the  aggregate  more  than 
half  of  the  population  of  Greater  New  York.  These 
figures  mean  much. 

Now  what  is  the  idea  of  the  Savings  Bank?  It  means 
industry  and  earned  money.  It  means  the  economy  that 
saves  money.  It  means  the  prudent  foresight  that  pro- 
vides for  the  rainy  to-morrow.  It  means,  in  a  word,  the 
average,  ordinary,  thrifty  virtue  of  the  great  body  of  the 
plain  people,  on  which  the  thrift,  economy,  virtue,  safety, 
and  the  stability  of  the  nation  depend. 

The  Savings  Bank  idea  also  means  the  intelligent  con- 
servatism that  seeks  safety  and  security  with  small  in- 
terest rather  than  speculation  and  risk  with  danger  to  the 
entire  accumulation.  It  means  even  more  than  this. 
It  involves  the  intelligent,  altruistic  care  that  men  who 
have  accumulated  a  competence  exercise  in  looking  after 
the  savings  and  the  investments  of  the  industrious  folk 
of  moderate  means.  So  that  the  Savings  Bank  stands  for 
the  virtue  that  is  represented  by  small  accumulations,  for 
the  conservatism  that  preserves  property,  and  for  the 
generous  discharge  by  strong  men  of  the  duty  and  the 
care  of  looking  after  their  weaker  neighbors.  Thus  the 
Savings  Banks  idea  embraces  most  that  really  makes  for 
the  ultimate  welfare  of  the  State. 


326  HISTORY  OF  THE  SAVINGS  BANKS 

It  stands  opposed  to  the  other  idea  which,  for  lack  of  a 
better  phrase,  I  shall  describe  as  the  gambling  idea.  I  do 
not  mean  that  all  ventures  are  gambling.  I  do  not  mean 
that  all  far-sighted  looking  into  the  future  is  gambling. 
I  do  not  mean  that  the  brains  and  the  foresight  which 
create  great  fortunes  necessarily  involve  the  idea  of  gam- 
bling, but  there  is  not  a  man  in  this  great  audience,  gath- 
ered as  you  are  from  the  large  villages,  the  inland  cities, 
and  the  great  metropolis,  but  who  must  have  realized, 
within  the  last  ten  years,  that  the  constant  tendency  of  a 
large  fraction  of  our  entire  community  is  toward  the 
gambling  idea  in  regard  to  getting  and  increasing  money. 

I  think  I  do  not  over  venture  the  statement  when  I 
say  that  the  bucket  shops  and  the  pool  rooms  of  the  City 
of  New  York  are  taking  in  more  money  each  day  than  the 
Savings  Banks  are.  This  is  a  startling  statement,  but 
the  boys  in  our  office,  the  boys  in  the  higher  classes  of 
some  of  our  schools,  the  young  men  who  are  working  in 
the  shops  and  in  the  factories,  the  men  servants  in  a  great 
many  of  our  homes,  are  taking  the  risk  of  the  pool  room 
instead  of  the  safety  of  the  Savings  Banks,  and  are  eager, 
anxious,  and  striving  to  get  rich. 

Now,  gentlemen,  this  thing  is  eating  as  a  canker  right  into 
our  business  and  home  life.  It  makes  petty  defalcations  in 
your  offices,  shops,  and  factories.  It  makes  petty  defal- 
cations in  my  law  office.  I  think  I  have  suggested  enough 
if  I  can  get  the  men  who  are  in  front  of  me,  when  you  go  from 
this  room,  to  think  seriously  and  thoughtfully  about  this. 

It  is  not  merely  wisdom,  but  it  is  the  imperative  neces- 
sity of  our  business  and  social  conditions  to-day  that  we 
shall  help  the  Savings  Bank  idea  of  economy,  of  industry,  of 
thrift,  of  conservatism,  and  that  wherever  we  are,  whether 
in  private  places  or  in  great  directories,  wherever  we 
touch  with  our  neighbors,  we  shall  try  to  put  our  influence 
on  the  side  of  the  conservative  Savings  Bank  idea.  Let 
us  try  to  stand  against  the  gambling  and  the  purely 
speculative  idea  which,  unless  checked  and  crushed,  will 
certainly  eat  into  and  destroy  this  Republic. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    327 

Long  ago,  the  story  runs,  that  One  stood  in  the  door- 
way of  the  Temple  and,  with  scourge  in  His  hand,  drove 
out  the  men  who  defiled  the  Temple  of  religion,  the  money- 
changers and  those  who  sold  doves.  Let  us  stand  in  every 
place,  small  and  large,  in  every  circle  of  influence  wherever 
we  touch  our  neighbor,  keeping  in  thought  that  figure 
standing  in  the  doorway  of  the  Temple  with  scourge  in 
His  hand. 

ADDRESS  OF  CHARLES  A.  CONANT 

Mr.  Chas.  A.  Conant  said  in  part: 

Mr.  President  and  Gentlemen  of  the  New  York  Savings 
Banks  Association:  The  banker  who  has  studied  the 
fluctuations  in  the  prices  in  the  past,  and  knows  the  in- 
fluences which  operate  upon  them,  is  in  a  position  to  judge 
the  future.  He  w^ill  find  difficulty  in  escaping  the  con- 
clusion that  the  return  upon  securities  tends  downward 
with  the  progress  of  civilization,  but  he  wUl  be  able  to 
discover  sufficient  wavering  upward  in  this  downward 
curve  of  the  rate  of  interest  to  enable  him  to  act  with 
prudence  and  success  in  taking  advantage  of  favorable 
conditions. 

Recent  events  have  been  favorable  to  the  Savings 
Banks  in  the  sense  that  they  have  reduced  the  prices  of 
many  first-class  investments.  In  one  sense  this  has  been 
unfavorable.  Where  securities  were  purchased  at  the 
inflated  prices  of  two  years  ago,  their  market  prices  make 
a  lower  showing  upon  the  balance  sheet  than  is  desirable, 
but  where  these  securities  are  of  unquestioned  value  and 
continue  to  pay  regular  dividends,  there  is  no  occasion  for 
serious  regret,  unless  the  mistake  of  paying  higher  prices 
was  carried  to  extremes  during  the  years  of  inflation.  In 
any  case  there  is  now  an  opportunity  to  recoup  the  natural 
errors  of  that  time  by  buying  the  best  securities  at  low 
prices.  Only  in  this  way  can  Savings  Banks  continue  to 
pay  the  rates  of  interest  which  are  now  customary.  The 
Savings  Banks  have  maintained  rates  of  interest  upon 


328  HISTORY  OF  THE  SAVINGS  BANKS 

their  deposits  much  better  than  some  other  enterprises, 
especially  when  it  is  taken  into  consideration  that  they 
cannot  afford  to  speculate  even  in  the  most  conservative 
manner  by  the  purchase  of  securities  which  are  not  ab- 
solutely safe,  not  only  in  the  opinion  of  those  who  issue 
and  those  who  deal  in  them,  but  in  the  opinion  of  the  en- 
tire investing  community.  A  remark  was  made  to  me 
recently  by  one  of  the  directors  of  a  Boston  bank  which 
puts  tersely  the  present  condition  of  many  Savings 
Banks — that  his  institution  was  not  paying  interest  out 
of  the  dividends  on  the  securities  recently  purchased,  but 
was  "living  on  the  good  things  of  the  past."  Fortu- 
nately, from  some  points  of  view,  the  opportunity  to 
acquire  some  of  these  good  things  is  more  favorable  at 
present  than  it  was  two  or  three  years  ago. 

The  managers  of  Savings  Banks  occupy  an  important 
position  in  the  financial  world.     .     .     . 

In  the  United  States  we  are  all  familiar  with  the 
growth  in  savings  deposits  from  $549,874,258  in  1870 
to  $819,106,973  in  1880;  $1,524,844,506  in  1890; 
$2,384,770,849  in  1900;  and  $2,815,483,106  in  1903.  We 
have  seen  Savings  Bank  deposits  multiply  by  one  hundred 
per  cent,  in  the  ten  years  from  1880  to  1890,  and  nearly 
double  again  from  1890  to  1903.  But  in  Europe  also 
similar  gains  have  occurred.  In  Great  Britain,  as  in  the 
United  States,  the  Postal  Savings  Banks  enjoyed  an  in- 
crease of  deposits  by  over  one  hundred  per  cent,  from 
£67,634,807  ($335,000,000)  in  1890  to  £140,392,916 
($700,000,000)  in  1901.  In  France  the  attack  by  the 
State  upon  the  church  has  checked  the  growth  of  deposits 
during  the  past  two  or  three  years,  but  from  1882  to  1890 
deposits  rose  from  1,802,497,809  francs  ($360,000,000) 
to  3,325,166,407  francs  ($660,000,000),  and  rose  at  the 
close  of  1900  to  4,274,257,535  francs  ($850,000,000). 
In  Germany  gross  deposits  at  the  close  of  1898  stood  at 
8,106,438,665  marks  ($2,000,000,000).  Belgium  showed 
a  gain  of  much  more  than  one  hundred  per  cent,  from 
1880  to  1890,  when  deposits  rose  from  125,098,287  francs 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    329 

($25,000,000)  to  325,415,412  francs  ($65,000,000),  and  a 
still  further  gain  of  one  hundred  per  cent,  to  1900,  when 
her  deposits  stood  at  661,507,887  francs  ($132,000,000). 
In  Italy  savings  deposits  rose  from  1,819,702,670  lire 
($360,000,000)  in  1890  to  2,503,174,624  lire  ($500,000,000) 
in  1902.  In  Austria-Hungary  the  increase  was  from 
3,319,743,006  crowns  ($660,000,000)  as  recently  as  1896 
to  357i7j955)505  crowns  ($740,000,000)  in  1900. 

The  directors  of  Savings  Banks,  therefore,  appear  in 
the  world  as  bidders  for  new  investments  to  the  amount 
of  perhaps  $250,000,000  per  year. 

Among  these  influences  which  tend  to  increase  the  rate 
of  return  on  capital  are  those  which  destroy  it  as  well  as 
those  which  create  new  demands  for  it  for  productive 
use.  Among  the  former  is  the  destruction  of  wealth  in 
war,  which  absorbs  the  savings  of  years  and  gives  a  higher 
value  to  the  new  savings  in  productive  industry.  This 
was  the  experience  of  Great  Britain  in  her  struggle  with 
the  Boers.  So  great  were  her  expenditures  for  war  pur- 
poses that  it  probably  absorbed  the  savings  of  the  British 
people  for  a  year  and  perhaps  for  several  years. 

The  fall  in  the  price  of  consols  was  not  chiefly  the  effect 
of  impaired  credit,  but  the  effect  of  an  increase  in  the 
demands  for  capital  in  proportion  to  the  supply.  In  1897, 
when  the  movement  of  the  rates  of  interest  was  most 
sharply  downward  throughout  the  world,  and  English 
consols  were  quoted  at  nearly  114,  the  return  which  they 
paid  was  less  than  that  paid  by  the  Savings  Banks  which 
mad  e  their  investments  chiefly  in  these  securities .  B  anks  in 
coming  into  the  market  for  high-class  securities  are  relieved 
of  the  competition  which  they  would  meet  from  even  ven- 
turesome investors  if  there  were  no  channels  for  drawing 
off  accumulated  capital  except  the  gilt-edged  securities. 
It  was  the  gilt-edged  securities  which  advanced  most 
sharply  during  the  years  when  new  enterprises  were  com- 
paratively stationary  and  a  constantly  increasing  mass  of 
saved  capital  was  competing  every  year  for  a  compara- 
tively fixed  quantity  of  safe  investments.     The  present 


33©  HISTORY  OF  THE  SAVINGS  BANKS 

would  seem  to  be  a  prudent  time  for  investing  in  safe  se- 
curities, with  a  view  of  offsetting  on  the  balance  sheet 
the  high  rates  paid  for  such  securities  in  years  where  there 
was  less  demand  for  new  capital. 

At  the  conclusion  of  Mr.  Conant's  address,  Mr.  Brad- 
ford Rhodes  moved  that  a  vote  of  thanks  be  tendered 
him  for  his  very  interesting  and  able  address,  saying  that 
the  topic  chosen  by  the  speaker  was  one  which  he  had 
made  a  specialty  of  for  many  years,  and  that  the  members 
of  the  Association  had  been  highly  edified  by  the  address. 

The  motion  prevailed  unanimously. 

DOES  ADVERTISING  FAY  FOR   SAVINGS  BANKS? 

The  following  address  was  given  by  Mr.  William  H.  S. 
Wood,  President  of  the  Bowery  Savings  Bank: 

Mr.  President  and  Gentlemen  of  the  Savings  Banks 
Association :  I  feel  a  good  deal  of  hesitation  in  addressing 
you  upon  the  subject  which  has  been  assigned  to  me, 
"Does  Advertising  Pay  for  Savings  Banks?"  As  I 
reflect  upon  advertising  as  a  mercantile  force,  I  am  carried 
back  to  the  history  of  the  early  days  of  the  nineteenth  cen- 
tury, when  this  method  of  publicity  was  in  its  primitive 
stage.  Take  the  early  numbers  of  the  Evening  Post  and 
the  Journal  of  Commerce.  The  following  advertisement 
appeared : 

J.  Jacob  Astor 

at  No.  8 1  Quincy  Street 

next  door  but  one  to  the  Friends'  Meeting  House 

Has  for  sale  an  assortment  of 

Pianofortes  of  the  newest  construction 

made  by  the  best  makers  in  London 

which  he  will  sell  on  reasonable  terms. 

He  gives  cash  for  all  kinds  of  furs,  and  has  for 

sale  a  quantity  of  Canada  Beaver  and  Beaver 

coating,  Racoon  Skins,  and  Racoon  Blankets, 

Muskrat  Skins,  &c.,  &c. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    331 

In  those  times  advertising  was  conducted  upon  lines  of 
extreme  dignity  and  simplicity.  Concise,  inexpensive, 
it  might  be  compared  to  a  brook  meandering  through  the 
meadows,  attracting  attention  by  rippling  on  its  way. 
To-day  it  is  a  rushing,  roaring  Niagara. 

Within  a  very  few  years  the  immense  accumulations 
of  the  thrifty  classes  in  Eastern  Savings  Banks  have,  not 
unnaturally,  attracted  attention,  and  so-called  Savings 
Banks  have  sprung  up  all  over  the  land,  nearly  always 
stock  affairs,  whose  first  consideration  is  to  use  the  money 
of  their  depositors  for  the  benefit  of  their  stockholders. 
In  not  one  of  the  states  are  these  concerns  so  limited  as  to 
their  investments  or  their  methods  of  transacting  business 
as  in  the  State  of  New  York. 

Department  stores  in  this  city,  and  BuUding  Loan 
Associations,  are  inviting  the  public  to  open  accounts 
with  them — in  one  way  or  another  ringing  in  the  savings 
idea,  notwithstanding  Section  131  of  the  Savings  Bank 
Law  of  this  State,  with  which  you  are  undoubtedly  famil- 
iar. 

With  these  facts  before  us,  it  must  be  appreciated 
that  the  deposits  in  the  bona  fide  Savings  Banks  of  this 
State  are  not  increasing  as  they  otherwise  normally 
would,  and  as  they  should  do  for  the  good  of  the  class 
for  whose  interests  they  are  organized.  All  these  cor- 
porations I  have  referred  to  are  actively  engaged  in  a 
vigorous  advertising  propaganda,  seeking  to  draw  to 
their  vaults  the  savings  of  those  who  are  industriously 
accumulating,  little  by  little,  the  modest  hoard  upon  which 
depends  the  happiness  and  comfort,  perhaps  of  old  age,  or 
perhaps  of  helpless  children.  Surely  it  is  not  for  us  to  sit 
with  folded  hands,  the  benevolence  of  our  forefathers 
dried  up  in  our  hearts,  and  see  such  dangerous  inroads 
into  the  secure  refuge  which  this  State  has  provided  for 
the  thrifty  and  industrious.  Why,  then,  should  not  we, 
too,  go  out  and  proclaim  on  the  street  corners  and  from  the 
hilltops  the  blessings  freely  offered  by  the  Savings  Banks 
of  the  State  of  New  York?    Allow  me  to  direct  your  at- 


332  HISTORY  OF  THE  SAVINGS  BANKS 

tention  to  another  feature  in  this  matter  of  advertising. 
A  year  ago  I  took  this  map  of  the  State,  and  pasted  over 
it,  here  and  there,  as  possibly  some  of  you  may  be  able 
to  see,  a  little  red  dot  on  the  city  or  town  where  an  organ- 
ized Savings  Bank  was  in  operation.  Note  how  many 
counties  are  without  them — Rockland,  which  might  nat- 
urally be  cared  for  by  Peekskill,  Ossining,  or  Dobbs 
Ferry;  Sullivan,  by  the  Savings  Bank  of  Ellenville;  Dela- 
ware and  Otsego,  by  Binghamton;  Schoharie,  by  the 
Savings  Banks  of  Albany;  Fulton,  by  Amsterdam;  Sar- 
atoga by  the  Albany  or  Cohoes  Savings  Banks;  Washing- 
ton, Warren,  Essex,  Hamilton,  Franklin,  Clinton,  Lewis, 
and  Saint  Lawrence,  by  the  banks  of  Albany,  Amsterdam, 
Utica,  Rome,  or  Watertown;  Tioga,  by  the  Savings  Banks 
of  Binghamton  or  Elmira;  Schuyler,  by  Elmira  or  Ithaca; 
Seneca,  Wayne,  Ontario,  and  Yates,  by  Ithaca,  Auburn, 
or  Rochester;  Steuben,  by  Elmira.  And  in  the  western 
part  of  the  State  there  are  Savings  Banks  at  Rochester 
and  Buffalo  only,  leaving  the  counties  of  Livingston, 
AUeghany,  Cattaraugus,  Chautauqua,  Wyoming,  Genesee, 
Orleans,  and  Niagara,  which,  as  at  present  situated,  should 
be  looked  after  by  the  banks  of  Rochester,  Buffalo,  or 
Elmira.  The  difficulties  surrounding  the  establishment 
of  a  Savings  Bank  in  this  State  are  now  so  many  and  so 
great,  and  the  competition  which  exists  in  the  form  of 
National  and  State  Banks  and  Trust  Companies  so  in- 
tense, and  the  profits  to  their  stockholders  so  material, 
that  the  prospect  for  additional  Savings  Banks  pure  and 
simple,  on  the  mutual  basis,  is  exceedingly  small.  Possibly 
some  may  say,  nevertheless,  why  is  not  a  Savings  Bank 
organized  and  started  in  each  of  these  counties?  Well, 
now,  Mr.  President,  it  is  not  an  easy  thing  in  this  State, 
as  we  all  know,  to  begin  and  develop  a  corporation  of  this 
sort.  Who  is  going  to  put  up  the  money  for  the  absolutely 
necessary  expenses?  For  no  one  can  tell  how  many 
years  may  elapse  before  the  costs  of  even  the  most  eco- 
nomical administration  can  be  met  after  paying  dividends 
to  depositors.     It  cannot  be  forgotten  that  Mr.  Kilburn 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    ss3 

will  require  a  satisfactory  bond  from  these  trustees,  for 
the  payment  of  this  inevitable  outgo,  before  his  consent 
is  given  to  the  establishment  of  any  new  Savings  Bank. 
I  am  positively  sure  that  the  time  will  soon  come  when 
the  older  banks,  some  of  them  at  least,  must  see  the  wis- 
dom of  establishing  branches  in  promising  localities;  but 
meanwhile  these  fields  will  be  preempted  by  other  kinds 
of  Savings  Banks,  all  of  them  subject  to  the  risks  of  busi- 
ness and  practically  unfettered  by  statutory  restrictions 
as  to  their  investments.  Under  such  conditions  and  pros- 
pects, it  must  seriously  be  considered  by  the  many  strong 
Savings  Banks  of  this  State,  whether  they  may  not  wisely 
extend  their  benevolent  operations  beyond  the  immediate 
environment  of  their  banking  house. 

And  here,  I  may  say,  there  is  nothing  in  the  law  to  pre- 
vent any  bank  opening  as  many  branches  as  it  likes,  pro- 
vided only  that  the  Superintendent  of  Banking  is  satisfied 
that  the  propriety,  convenience  of  access  to  depositors, 
the  density  of  the  population  in  the  neighborhood,  in  the 
language  of  the  law,  appear  to  warrant  the  issuing  of  a 
certificate  of  approval  of  such  bank  as  proposed.  I 
very  much  doubt  if  any  one  at  all  familiar  with  Sav- 
ings Banks  would  not  readily  admit  that  such  branches 
by  strong  banks  are  infinitely  more  safe  than  new  cor- 
porations, and  especially  when  we  know  that  trustees 
of  such  are  tempted  to  make  the  cheapest  investments 
permitted  by  law,  for  the  sake  of  the  possible  larger 
returns,  and  to  promise  a  four  per  cent,  dividend  to 
attract  depositors. 

How,  then,  can  the  missionary  work  I  have  suggested 
best  be  done?  I  do  not  feel  that  it  is  my  place  to  do  more 
than  to  tell  you  of  some  methods  in  operation  by  the 
Bowery  Savings  Bank. 

First,  and  most  important  of  all,  the  preparation  and 
circulation  of  a  neat  little  booklet  on  "Banking  by  Mail." 
We  send  it,  with  a  signature  slip  and  identification  card 
enclosed,  throughout  the  district  from  which  we  desire 
to  obtain  depositors.     Our  returns  from  these  have  been 


334  HISTORY  OF  THE  SAVINGS  BANKS 

large;  andl  am  informed  by  more  than  one  non-advertising 
bank  in  this  city  that  they  have  been  pestered  to  death  by 
people  asking  them  to  open  such  accounts.  Of  course,  k 
they  do  not  want  such,  we  are  sorry  to  have  caused  any 
annoyance;  but  we  cannot  help  feeling  glad  we  have  at 
least  stirred  the  people  up.  Kindly  note  here,  as  I  have 
intimated  at  the  outset,  that  the  Bowery  Savings  Bank,  in 
most  of  its  advertisements,  invites  the  opening  of  an  ac- 
count with  it,  or  in  any  good  Savings  Bank  which  may  be 
more  convenient.  We  are  not  competing  with  other 
Savings  Banks.  We  are  all  brethren  in  benevolent  work, 
and  should  pull  together.  At  any  rate,  that  is  the  way  we 
like  to  feel  and  act. 

Next,  we  have  a  larger  and  fuller  description  of  our 
bank,  handsomely  illustrated,  sent  to  all  who  ask  for 
it. 

We  send  out  in  a  year  to  manufacturers  in  our  district 
about  two  million  pay  envelopes,  each  bearing  an  invita- 
tion to  open  an  account,  to  be  used  in  weekly  settlement 
with  work  people.  We  have  tried  an  invitation  card  to 
actors  and  actresses,  people  who  are  so  often  stranded  far 
from  home,  utterly  penniless.  That  has  had  some  result, 
but  we  are  compelled  to  admit  not  so  much  as  we  hoped 
for. 

We  are  now  engaged  in  circulating  a  new  booklet  to  the 
clerks  of  this  city  which,  if  it  promises  success,  will  require 
several  hundred  thousand  copies  to  cover  the  field.  Other 
pamphlets  for  specific  objects  are  in  the  press  and  will  be 
issued  shortly. 

As  to  newspaper  advertising,  it  requires  caution  and 
sound  judgment  not  to  waste  more  money  than  is 
warranted  by  possible  returns.  We  have  tried  all  kinds; 
some  have  paid,  some  have  not.  I  refrain  from  going 
into  details,  and  add  simply,  as  one  sometimes  sees 
at  the  bottom  of  a  servant's  reference  from  his  last 
employer,  "Further  particulars  on  application."  But 
please  do  not  ask  me  to  write.  You  must  come  in  and 
get  them- 


CHARLES  ADDISON  MILLER 


PRESroENT,  IQ08 
COUNSEL,   1908 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    335 
LETTER   FROM   CHAS.   A.   MILLER 

The  following  was  read  by  the  Secretary: 

Utica,  N.  Y.,  May  3,  1904. 
To  the  President  of  the  Savings  Banks  Association  oj  the 

State  of  New  York: 

Dear  Sir:  We  have  witnessed,  from  time  to  time, 
attacks  upon  our  Savings  Bank  system  which  have  had 
their  rise  in  various  ways,  have  been  pressed  from  various 
motives,  and  have  been  supported  by  different  interests. 
We  have  opposed  these  attacks,  sometimes  individually, 
sometimes  collectively,  and  with  varying  success.  We 
have  escaped  taxation  upon  our  deposits,  but  our  surplus 
has  been  taxed;  the  scope  of  our  investments  has  been 
properly  enlarged  at  our  request,  but  improper  invest- 
ments have  been  forced  upon  us  in  spite  of  opposition. 
We  represent  the  largest  aggregation  of  wealth,  in  private 
hands,  in  the  United  States,  but  we  must  confess  with 
humiliation  that  we  have  less  influence  with  the  average 
majority  in  the  Legislature  than  corporations  whose  entire 
capital  stock  and  bonded  debt  could  be  paid  out  of  the 
annual  income  of  one  of  our  banks. 

The  necessity  of  frequent  meetings  and  prompt  action 
has  made  it  necessary  that  a  large  majority  of  our  Execu- 
tive Committee  should  live  in  New  York.  This  is  proper, 
and  I  should  be  sorry  to  see  it  changed;  nevertheless,  I  am 
confident  that  we  shall  never  be  effective  in  our  efforts 
until  some  means  is  found  to  extend  our  organization  and 
bring  it  more  closely  into  touch  with  the  country  banks. 
The  country  banker  is  in  a  position  to  give  most  effective 
aid  to  the  Association.  He  knows  his  Senator  and  Mem- 
ber of  Assembly  personally,  often  intimately.  He  can 
work  up  a  public  sentiment  in  a  small  community  with 
comparative  ease,  and  he  generally  is  in  position  to  com- 
mand the  assistance  of  the  local  press.  AH  this  makes  it 
of  the  utmost  importance  that  his  interest  should  be 
aroused,  that  the  purposes  of  the  Association  should  be 


336  HISTORY  OF  THE  SAVINGS  BANKS 

fully  and  promptly  explained  to  him,  and  his  cooperation 
secured. 

I  believe  that  this  might  easily  be  accomplished  by  a 
division  of  the  banks  into  groups  on  some  geographical 
lines.  This  might  be  done  by  counties  or  by  senatorial, 
congressional,  or  judicial  districts.  The  Chairman  of 
each  group  could  then  make  it  his  business  to  visit  the 
different  members,  and  act  as  a  go-between  between  his 
group  and  the  Executive  Committee.  He  could  see  to  it 
that  each  bank  was  represented  at  hearings  when  this 
was  thought  advisable,  and  at  other  times  he  could  attend 
as  a  representative  of  all  the  banks  in  the  group.  In  this 
way  the  attitude  of  the  Executive  Committee  can  be 
quickly  and  intelligently  communicated  to  every  bank  in 
the  Association,  and  the  reasons  for  it  fully  explained, 
and  in  return,  the  Committee  can  be  promptly  advised 
of  the  sentiment  of  the  banks  through  the  entire  State. 
This  would  tend,  I  think,  to  secure  harmony  and  una- 
nimity of  action,  and  by  stirring  up  intelligent  zeal  among 
the  individual  banks  would  make  our  organization  so 
compact  and  powerful  that  it  would  be  difficult,  if  not 
impossible,  for  the  Legislature  to  disregard  its  proper 
wishes. 

I  regret  my  inability  to  be  present  at  this  meeting  of  the 
Association  to  present  these  views  personally  and  to  move, 
as  I  hope  some  one  may,  in  my  absence,  the  appointment 
of  a  Committee  to  consider  the  possibility  of  further  per- 
fecting the  organization  of  this  Association,  to  report  at 
our  next  annual  meeting. 

Very  truly  yours, 

Chas.  a.  Miller, 
Second  Vice-President,  the  Savings  Bank  of  Utica. 


CHAPTER  XII 

Twelfth  Annual  Convention — Vote  of  Thanks  to  the  Chairman  of 
the  Executive  Committee,  Mr.  Miller — Mr.  Wm.  H.  S.Wood  on 
the  Attempted  Repeal  of  the  Franchise  Tax  upon  Savings  Banks 
Enacted  in  1901 — Opposition  to  All  Legislation  Authorizing  the 
Interstate  Commerce  Commission  to  Fix  Railroad  Rates — 
Addresses  by  Professor  Stryker  of  Hamilton  College  and 
Col.  William  Cary  Sanger. 


P 


RESIDENT  William  Bayard  Van  Rensselaer,  of  the 
Albany  Savings  Bank,  called  the  Twelfth  Annual 
Convention  to  order  on  May  18,  1905. 

ADDRESS   OF   PRESIDENT   VAN  RENSSELAER 


Gentlemen  and  members  of  the  Savings  Banks  Asso- 
ciation: I  take  great  pleasure  in  welcoming  you  to  the 
Twelfth  Annual  Meeting  of  the  Savings  Banks  Association 
of  the  State  of  New  York. 

Since  our  last  annual  meeting  franchises  to  carry  on 
the  Savings  Banks  business  have  been  granted  to  the 
Guardian  Savings  Bank  of  Brooklyn  and  to  the  North  Side 
Savings  Bank  in  the  Bronx.  We  invite  these  institutions 
to  join  our  Association,  and  we  shall  be  glad  to  welcome 
them  as  members. 

The  past  year  has  been  a  prosperous  one  for  our  Savings 
Banks  and  for  this  Association.  The  annual  report  of  the 
Superintendent  of  Banks  shows  that  for  the  year  1904, 
while  the  amount  due  depositors  has  increased  by  over 
$67,000,000,  the  resources  have  increased  over  seventy- 
three  millions  ($73,000,000),  showing  an  increase  in  sur- 
plus or  reserve  of  nearly  six  millions  of  dollars  ($6,000,000). 

The  work  of  the  Association  for  the  past  year  will  be 
reported  to  you  by  the  chairmen  of  the  respective  com- 


338  HISTORY  OF  THE  SAVINGS  BANKS 

mittees,  but  I  want  to  call  your  attention  to  one  feature 
of  the  Savings  Bank  Investment  Law  which  has  been 
passed  by  the  Legislature  this  year.  It  provides  defi- 
nitely that  twenty-five  per  cent,  of  the  assets  at  par  of  any 
Savings  Banks  may  be  held  in  railroad  mortgage  bonds. 
The  interpretation  of  the  old  law,  made  by  the  Super- 
intendent of  Banks,  was  that  twenty-five  per  cent,  of 
the  deposits  only  might  be  invested  in  railroad  mortgage 
bonds  at  their  cost  price.  This  change  in  the  law  would 
permit  the  banks  to  increase  their  present  holdings  of 
about  $197,000,000  in  railroad  mortgage  bonds  to  over 
$300,000,000.  It  is,  therefore,  of  the  utmost  importance 
that  these  securities  should  be  and  should  remain  abso- 
lutely safe.  I  believe  that  the  investment  bill  was,  per- 
haps, the  most  important  matter  that  this  Association  has 
ever  accomplished,  and  we  cannot  be  too  grateful  to 
Governor  Higgins  for  his  hearty  support  and  assistance. 
The  passage  of  this  bill  ought  to  do  away  with  special 
legislation  for  Savings  Bank  investments;  but  the  Execu- 
tive Committee  must  be  ever  on  the  alert  to  resist  any 
future  attempts  to  lower  the  standard  or  to  insert  speci- 
fied cities  or  railroad  securities  which  do  not  come  up 
to  the  standard. 

In  this  connection  it  seems  to  me  that  we  should  con- 
sider the  proposed  legislation  at  Washington  which  would 
authorize  the  Interstate  Commerce  Commission  to  fix 
railroad  rates  and  to  enforce  them  at  once.  The  power 
given  to  an  irresponsible  commission,  if  exercised  capri- 
ciously or  with  undue  consideration,  might  result  in  seri- 
ous losses  in  the  earnings  of  the  railroad  companies  and 
the  consequent  depreciation  of  the  securities  held  by  the 
Savings  Banks. 

At  the  last  annual  meeting  a  resolution  was  passed  for 
the  appointment  of  a  Special  Committee  to  undertake  the 
repeal  of  the  Franchise  Tax  on  the  surplus  of  Savings 
Banks.  The  Chairman  of  that  Committee  will  report  what 
has  been  done,  but  I  feel  constrained  to  call  the  attention 
of  the  Association  to  the  seriousness  of  the  lack  of  absolute 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   339 

concurrence  of  all  the  members  of  the  Association  in  all 
resolutions  duly  adopted  by  the  Association  or  its  Execu- 
tive Committee.  In  the  attempt  to  get  this  tax  repealed 
we  were  told  that  some  Savings  Banks  men  informed 
Governor  Higgins  and  certain  of  the  members  of  the 
Legislature  that  many  of  the  Savings  Banks  were  in- 
different about  having  this  tax  removed.  The  result  of 
this  attitude  increased  the  difficulties  of  the  Committee  and 
furnished  argument  for  those  members  of  the  Legislature 
who  are  in  favor  of  retaining  the  tax.  If  any  Savings 
Banks  officers  are  not  in  unanimity  with  the  work  or 
decisions  of  the  Association  or  its  Executive  Committee, 
let  them  in  any  event  communicate  Mdth  the  Executive 
Committee,  where  both  sides  of  every  question  will  be 
carefully  considered.  Loyalty  and  unity  are  necessary 
to  success. 

REPORT  OF   THE  EXECUTIVE   COMMITTEE 

Mr.  Miller  read  the  report  of  the  Executive  Committee 
as  follows: 

At  our  meeting  in  May,  1904,  the  Executive  Committee 
reported  that  Senator  Townsend's  bill  to  add  to  the 
list  of  Savings  Bank  investments  "  the  first  mortgage  five 
per  cent,  bonds  of  the  Utica,  Clinton  &  Binghamton 
Railroad  Company,"  had  passed  both  branches  of  the 
Legislature,  in  spite  of  the  opposition  of  this  Association, 
and  was  then  in  the  hands  of  the  Governor.  Governor 
Odell,  after  a  hearing,  refused  to  approve  this  measure. 

The  Committee  met  on  July  14,  1904,  and  elected 
Mr.  Miller,  of  the  Savings  Bank  of  Utica,  a  member  to 
fill  the  vacancy  caused  by  Mr.  Van  Rensselaer's  election 
as  President  of  the  Association.  The  Committee  organ- 
ized b}'  electing  Mr.  MUler,  Chairman,  and  reelecting  the 
other  officers.  Pursuant  to  the  resolutions  adopted  at  the 
last  annual  meeting,  the  President  of  the  Association  ap- 
pointed Mr.  Wood  Chairman  of  a  Committee  to  be  se- 


340  HISTORY  OF  THE  SAVINGS  BANKS 

lected  by  himself  from  the  members  in  each  county  where 
there  is  a  Savings  Bank,  and  in  such  other  counties  as 
might  be  desirable,  to  consider  and  take  such  proper  action 
as  might  bring  about  the  repeal  of  the  law  imposing  an 
annual  tax  upon  the  Savings  Banks  of  the  State. 

At  a  meeting  held  on  October  20,  1904,  Mr.  Wood  re- 
ported to  the  Executive  Committee  that  he  had  secured 
the  promise  of  each  candidate  for  the  oihce  of  Governor, 
that  he  would  do  all  in  his  power  to  secure  the  repeal  of 
this  law,  if  elected.  He  reported  that  he  had  sent  som_e 
sixteen  hundred  letters  to  the  editors  throughout  the  State 
urging  them  to  work  for  the  repeal,  and  that  he  had  fur- 
nished the  banks  with  circulars  for  distribution. 

A  Committee,  consisting  of  Messrs.  Rhoades,  Mills, 
Schieren,  Van  Rensselaer,  and  MiUer,  was  appointed  to 
take  up  the  matter  of  the  present  law  regulating  Savings 
Bank  investments,  and,  if  necessary,  to  draft  an  amend- 
ment or  devise  some  method  for  the  better  protection  of 
the  banks,  and  submit  the  same  to  the  E:xecutive  Com- 
mittee. 

The  bill  prepared  by  this  Committee,  with  the  provi- 
sions of  which  they  are  now,  without  doubt,  sufficiently 
familiar,  was  submitted  to  Messrs.  White  and  Kemble, 
weU'known  experts  on  railway  securities,  and,  with  their 
report  upon  it,  was  presented  to  tlie  Executive  Committee 
at  a  meeting  held  on  February  14th.  The  Committee 
acted  favorably  upon  it,  and  authorized  its  introduction 
in  the  Legislature.  Copies  of  tlie  bill  and  of  the  report 
of  Messrs.  White  and  Kemble  were  sent  to  each  bank. 

The  bin  was  subsequently  introduced  in  the  Senate  by 
Senator  Stevens,  and  in  the  Assembly  by  Mr.  J.  T.  Smith, 
the  chairman  of  the  Committee  on  Banks.  A  hearing 
was  had  upon  this  bill  before  the  Senate  Committee  on 
March  ist,  which  was  largely  attended  by  representa- 
tives of  the  banks,  and  the  bOl  was  favorably  reported 
to  the  Senate,  which,  however,  subsequently  recommitted 
the  bill  for  a  further  hearing.  In  the  House  Mr.  Smith 
obtained  the  passage  of  the  bill  without  delay. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    341 

Upon  the  second  hearing  l)efore  the  Senate  Committee 
on  Banks  an  effort  was  made  to  add  by  name  the  bonds  of 
the  Chicago  &  Eastern  Illinois  Railroad  Company  to  the 
list  of  legal  investments.  This  was  opposed  by  your  Com- 
mittee, and  although  the  Committee  on  Banks  reported 
favorably  upon  this  change,  it  was  finally  abandoned, 
and  the  bill  passed  the  Senate  in  the  form  in  which,  it  had 
been  prepared  by  your  Committee.  At  this  "writing  it  is 
before  the  Governor  and  wUl  undoubtedly  receive  his  ap- 
proval. 

Your  Committee  feels  that  it  is  greatly  indebted  to 
Messrs.  Smith  and  Stevens  for  their  efforts  in  securing 
the  passage  of  this  legislation,  and  especially  wishes  to 
record  its  appreciation  of  the  attitude  of  Governor  Higgins, 
without  whose  active  cooperation  its  efforts  would  hardly 
have  been  successful.  The  Governor  appreciated  fully  the 
importance  of  our  proposed  amendment  and  did  not 
hesitate  to  give  us,  as  far  as  he  could  properly,  the 
benefit  of  his  a"pproval  and  support. 

Several  bills  repealing  the  so-called  franchise  tax  upon 
the  surplus  of  Savings  Banks  were  introduced  in  both 
Houses  of  the  Legislature,  but  remained  in  Committee 
until  close  to  the  end  of  the  session.  Although  Governor 
Higgins  urged  the  passage  of  this  legislation  and  one  of 
the  biUs  passed  the  Senate,  an  objection  prevented  its 
being  reached  for  final  passage  in  the  Assembly.  The 
indefatigable  efforts  of  Mr.  Wood  in  behalf  of  this  repeal 
are  fully  appreciated  by  the  banks.  The  details  of  this 
struggle  will  appear  more  fully  in  the  report  of  this  special 
Committee, 

Your  Committee  entered  a  formal  protest  against  the 
bin  introduced  in  the  Senate  by  the  Committee  on  Tax- 
ation and  Retrenchment  "to  amend  the  tax  law  in  rela- 
tion to  the  taxation  of  mortgage  indebtedness"  popularly 
known  as  the  Mortgage  Tax  Bill.  Nevertheless  it  was 
not  thought  advisable  to  attend  the  hearing  upon  the 
bill  or  to  enter  upon  an  active  campaign  of  opposition, 
because  it  was  apparent  that,  the  bill  having  been  made 


342  HISTORY  OF  THE  SAVINGS  BANKS 

a  party  measure,  opposition  woujd  be  absolutely  futile, 
and  would  serve  only  to  alienate  the  leaders  of  tlie  Repub- 
lican Party  on  whom  we  relied  for  the  repeal  of  the  pres- 
ent franchise  tax  and  the  passage  of  our  investment  law. 

It  was  evident  that  the  franchise  tax  would  only  be 
removed  if  other  sources  of  revenue  could  be  found,  and 
active  opposition  to  the  Mortgage  Tax  Bill  would^  if  suc- 
cessful, have  prevented  the  fulfilment  of  this  condition 
precedent,  whUe,  if  unsuccessful,  it  miglit  still  have  de- 
feated our  efforts  for  repeal  by  arousing  the  antagonism 
of  the  party  in  control  of  the  Legislature.  As  the  Mort- 
gageTax  Law  applies  only  to  loans  made  after  July  i,  1905, 
the  Committee  felt  that,  at  worst,  it  would  not  impose  a 
very  heavy  impost  upon  the  banks  for  some  years  to  come, 
and  that  between  tAvo  evils  "we  might  better  endure  this 
than  the  tax  upon  our  surplus  funds.  That  we  should  be 
obliged  to  endure  both  could  not  then  be  foreseen. 

The  bill  introduced  by  Senator  Cassidy  requiring  banks 
to  pay  over  to  the  State  the  amount  due  upon  all  accounts 
on  which  neither  deposits  nor  "withdrawals  had  been  made 
for  ten  years  was  reported  favorably  by  the  Committee  on 
Banks,  but  at  the  request  of  your  Executive  Committee 
was  committed  for  a  hearing.  This  was  had  on  April  2  7th, 
and,  in  spite  of  energetic  protest  by  your  representatives, 
the  Committee  reported  the  bill  favorably.  Fortunately, 
however,  it  was  not  reached  before  the  adjournment  of  the 
Senate. 

The  Committee  also  entered  a  protest  against  several 
other  bills  more  or  less  injurious  to  our  interests,  and 
none  of  them  became  laws. 


Mr.  Mills:  I  think  that  there  is  a  word  of  explanation 
due  to  the  Association  so  that  it  can  appreciate,  in  some 
measure,  the  value  of  the  services  of  the  Chairman  of  the 
Executive  Committee.  Mr.  Miller  drew  that  bill  himself. 
It  was  a  work  that  took  a  great  deal  of  time  and  a  great 
deal  of  close  study,  and  I  do  not  think  that  the  result 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    343 

could  have  been  more  ably  attained  by  any  counsel  whom 
we  might  have  retained.  That  is  the  so-called  investment 
bill  to  which  I  refer. 

I  speak  of  what  I  know  because  I  was,  from  the  com.- 
mencement,  a  member  of  the  sub-committee  appointed 
by  the  Executive  Committee  to  take  up  this  matter  and 
carry  it  on  to  the  end.  Mr.  WTiite,  in  an  interview  with 
me,  told  me  that  he  thought  that  the  provisions  of  that 
bill  were  the  best  that  he  had  ever  seen  in  any  Savings 
Bank  investment  bill,  and  that  he  thought  it  would  be 
only  a  short  time  when  it  would  be  copied  by  most  of  the 
states  in  which  Mutual  Savings  Banks  existed. 

Mr.  Miller  is  a  very  modest  man  and  I  think  it  is  simply 
due  to  him  that  this  Association  should  appreciate  in 
some  measure  the  immense  amount  of  personal  work 
that  he  has  put  into  this  matter,  not  only,  as  I  say,  in 
drawing  the  bill,  which  he  did  himself,  but  also  in  his 
unceasing  effort  to  pass  it  through  both  Houses  of  the 
Legislature.  I  think  an  expression  of  this  Association 
should  be  recorded  on  the  minutes  in  appreciation  of  his 
services. 

This  resolution  was  seconded  by  Mr.  McMahon,  also 
a  vote  of  thanks  to  Mr.  Rhoades;  both  were  unanimously 
carried. 

ATTEMPTED  REPEAL  OF  THE  FRANCHISE  TAX  LAW 

Mr.  Wm.  H.  S.  Wood  presented  the  following  report 
on  the  repeal  of  the  Franchise  Law: 

Mr.  President  and  Gentlemen:  Your  Committee,  ap- 
pointed one  year  ago  to  promote  the  repeal  of  the  Franchise 
Tax  upon  Savings  Banks  enacted  in  1901,  beg  respect- 
fully to  report: 

The  Chairman  of  the  Committee,  with  the  assistance  of 


344  HISTORY  OF  THE  SAVINGS  BANKS 

the  President  of  our  Association,  selected  thirty-five  gen- 
tlemen from  various  sections  of  the  State,  who  were  there- 
upon appointed  to  serve  as  the  Committee. 

It  was  recognized  that  while  the  trustees  and  officers 
of  Savings  Banks  could  not  properly  take  any  part  in 
politics,  and  had  no  wish  to  do  so,  nevertheless  we  were 
confronted  by  a  condition  which  we  had  found  ourselves 
unable  to  remove  without  the  assistance  of  those  most 
vitally  interested,  namely,  the  depositors  themselves.. 
From  the  two  millions,  four  hundred  thousand  of  these, 
we  eliminated,  after  careful  and  laborious  calculation, 
one  million,  nine  hundred  thousand  as  women,  minors, 
and  others,  leaving  fully  five  hundred  thousand  of  the 
depositors  in  the  Savings  Banks  of  the  State  as  probable 
active  voters  in  any  election.  If  it  was  found  necessary,  it 
was  determined  that  these  men  should  be  informed  of  the 
injustice  being  done  them  by  the  Legislature  of  the  State, 
telling  them  that  the  remedy  lay  in  their  votes,  in  their 
sending  to  the  Legislature  of  1905  such  men  only  as 
pledged  themselves  to  repeal  the  tax. 

In  August  last,  just  previous  to  the  nominations  for 
Governor  of  the  State,  the  Chairmen  of  both  RepubHcan 
and  Democratic  Parties  agreed  with  us  to  insert  in  their 
platforms  a  plank  committing  each  to  the  repeal  of  the 
Franchise  Tax  on  Savings  Banks,  which  plank  as  sub- 
mitted to  us  was  entirely  satisfactory.  This  subject  was 
submitted  to  both  candidates  for  the  Governorship,  with 
a  request  that  they  incorporate  in  their  respective  letters 
of  acceptance  definite  declarations  advocating  the  repeal 
of  this  tax.  Both  of  these  gentlemen  complied  with  the 
request,  and,  as  party  leaders,  in  the  most  definite  and 
positive  manner  pledged  their  parties  to  such  repeal. 

Your  Committee,  in  order  to  bring  the  subject  directly 
to  the  attention  of  the  voters  of  the  State,  and  especially 
that  large  number  of  them  who  were  individually  inter- 
ested— depositors  in  our  banks — had  a  pamphlet  pre- 
pared and  printed,  entitled  "For  Repeal  of  the  Franchise 
Tax  on  Savings  Banks"   also  a  leaflet  containing  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    345 

official  statements,  of  both  Republican  and  Democratic 
platforms,  and  the  letters  of  acceptance  of  the  candidates 
for  Governor  of  both  parties.  Of  these  documents  several 
hundred  thousand  copies  were  handed  to  our  depositors 
and  circulated  in  other  ways. 

Your  Committee  desires  to  place  on  record  its  high  ap- 
preciation of  the  honest  and  active  cooperation  of  Gover- 
nor Frank  W.  Higgins.  He  placed  the  repeal  of  the 
Savings  Bank  Tax  before  both  Senate  and  Assembly 
in  an  Emergency  Message  which  was  sent  to  the  Senate 
and  to  the  Assembly  on  the  4th  of  this  month,  in  which 
it  will  be  noted  that  he  properly  places  the  reason  for 
such  repeal  solely  upon  the  fact  that  the  party  and  its 
candidates  had  pledged  themselves  before  the  election 
to  do  so. 

In  his  message  he  says:  "Pledges  to  the  people  must 
faithfully  be  kept,  and  cannot  safely  be  ignored  on  the 
specious  plea  of  necessity.  The  Republican  Party  is  com- 
mitted to  this  repeal  by  the  repeated  public  declaration 
of  its  candidates.  It  cannot  afford  to  refuse  to  do  its 
duty  in  this  regard.  The  reasons  for  relieving  the  Sav- 
ings Banks  from  this  tax  as  a  matter  of  justice  are  more 
cogent  now  than  at  the  opening  of  the  session." 

We  Savings  Banks  men  are  not  laboring  for  ourselves. 
We  have  no  personal  interest  in  urging  upon  our  Senators 
and  Assemblymen  that  a  mistake  has  been  made;  that  this 
tax  is  unjust;  that  it  does  more  or  less  deprive  our  poor 
depositors  of  a  rate  of  interest  that  the  Savings  Banks  w^ould 
all  be  glad  to  pay.  It  is  true  that  probably  in  no  case 
would  the  amount  of  the  tax  upon  any  bank  enable  that 
bank  to  pay  an  additional  half  of  one  per  cent,  to  its 
depositors;  but,  bearing  in  mind  that  the  State  law  forbids 
the  payment  of  any  dividend  which  is  not  earned  by  the 
bank,  and  that  oftentimes  even  less  than  the  amount  of 
the  tax  would  enable  a  bank  to  show  earnings  enabling 
it  to  pay  a  half  per  cent,  more  than  it  can  now  do  under 
this  incubus,  we  insist  that  it  be  recognized  we  are  working 
with  the  State  to  elevate  and  protect  the  working  people 


346  HISTORY  OF  THE  SAVINGS  BANKS 

of  our  State.  We  want  to  work  in  harmony  with  the 
elected  and  appointed  officers  of  the  State  Government, 
quietly,  unobtrusively,  subject  to  such  wise  laws  as,  with 
this  one  exception,  have  heretofore  been  enacted;  but  if 
the  poor  people  for  whose  protection  we  are  organized 
are  injured  ever  so  little  by  unjust  laws,  we  should  be 
faithless  to  our  trust  and  to  the  State  which  has  placed  our 
depositors  in  our  hands,  if  at  such  a  time  as  this  we  did  not 
remind  the  political  party  in  power  that  Abraham  Lincoln 
once  said:  "You  can  fool  some  of  the  people  all  the 
time;  you  can  fool  all  the  people  some  of  the  time;  but 
you  can't  fool  all  the  people  all  the  time." 

Senator  Alfred  R.  Page  of  the  Nineteenth  Senatorial 
District,  by  request,  took  charge  of  our  bill  to  repeal  the 
P'ranchise  Tax,  in  December  last,  and  introduced  it  into 
the  Senate  on  the  4th  of  January,  the  first  bill  on  the 
calendar.  It  was  allowed  to  rest  in  the  hands  of  the  Com- 
mittee on  Taxation  and  Retrenchment  without  disturb- 
ance for  four  months,  because  Governor  Higgins  had  told 
us  that  he  could  not  urge  this  bill  upon  the  Legislature, 
depriving  the  State  of  ever  so  little  of  its  income,  without 
first  finding  other  means  for  increasing  the  revenues  of 
the  State.  It  was  most  unfortunate  that  this  condition 
existed,  and  that  so  great  difficulty  was  found  in  providing 
sources  of  revenue,  since  the  delay  carried  over  the  consid- 
eration of  our  bill  until  the  last  day  of  the  session. 

Your  Committee  was  invited  to  attend  a  hearing  on 
the  bill  early  in  January,  but  respectfully  declined  anything 
of  the  kind.  If  there  was  anything  in  connection  with 
the  Savings  Banks  of  this  State  which  had  not  been 
thrashed  over  time  and  again  before  the  Legislature,  this, 
at  least  in  our  judgment,  was  not  the  proper  time  to  go 
into  details  again.  We  had  pledges  of  parties,  governors, 
candidates  for  governors,  from  some  Senators,  and  from 
many  Assemblymen,  to  repeal  this  Franchise  Bill.  Why 
should  we  do  anything  to  obscure  the  issue?  We  depended 
upon  the  promises  of  more  than  one  man.  The  parties 
went  into  the  election  of  1904  with  pledges  which  they 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    347 

meant  should  be  understood  by  the  people  in  only  one 
way — the  tax  was  to  be  repealed. 

Immediately  preceding  the  opening  of  the  Legislature, 
your  Committee  became  aware  there  would  be  serious 
dilSiculty  in  securing  the  passage  of  the  contemplated 
act,  for  the  reason  that  the  Republican  Party  had  de- 
termined, as  part  of  its  policy,  to  adhere  to  the  system  of 
the  so-called  indirect  taxation,  and  would  not  consent 
under  any  circumstances  to  any  measure  which  might  re- 
quire a  return  to  direct  taxation.  The  existence  of  a  large 
deficit  in  the  State  revenues  required  that  new  sources 
of  income  be  found.  Governor  Higgins  and  other  party 
leaders  stated  to  your  Committee  that  it  would  be  un- 
wise to  urge  the  repeal  of  the  Savings  Banks  Tax,  with 
the  consequent  loss  to  the  State  of  about  seven  hundred 
and  fifty  thousand  dollars  of  revenue,  until  the  additional 
revenue  required  to  meet  the  deficit  had  been  provided 
for  by  the  passage  of  other  pending  measures,  particularly 
the  Stock  Transfer  Tax  and  the  Mortgage  Bills,  concern- 
ing which  there  was  serious  division  of  party  opinion. 
The  history  of  these  revenue  measures  is  familiar  to  you 
all.  Because  of  the  bitter  opposition  to  them  in  certain 
sections  of  the  State,  their  passage  was  delayed  for  many 
weeks,  in  fact,  until  almost  the  close  of  the  Legislature; and 
until  they  were  disposed  of  it  was  deemed  inexpedient  by 
us  to  urge  the  bringing  forward  of  the  Savings  Banks 
Repeal  Bill.  The  measure  thus  did  not  come  up  for  con- 
sideration until  the  very  last  day  of  the  Legislature,  when 
it  was,  with  a  good  majority,  passed  by  the  Senate,  where 
the  chief  opposition  had  been  expected.  The  delay, 
however,  made  possible  its  defeat  in  the  Assembly  by 
obstructive  tactics  through  which  consideration  of  the 
measure  might  be,  and  actually  was,  prevented.  Unani- 
mous consent  is  necessary  for  its  immediate  consideration 
by  the  Assembly  when  transmitted  by  the  Senate.  Late 
as  it  was,  this  consent  could  have  been  obtained  had  cer- 
tain party  leaders  carried  out  their  promises,  and  had  the 
pledges  of  the  platform  been  considered  binding  by  them. 


348  HISTORY  OF  THE  SAVINGS  BANKS 

The  influence  which  the  promoters  of  the  bUl  had  a  right 
to  expect  to  further  the  passage  of  the  bill  through  the 
Assembly  was  not  exerted ;  consequently  the  obstruction- 
ists were  able  to  defeat  the  bill  by  preventing  its  being 
brought  upon  the  floor  for  discussion  and  a  vote.  Had  the 
leaders  in  the  Assembly  permitted  a  vote  upon  it,  or  had 
it  been  practicable  to  advance  the  measures  at  an  earlier 
day,  it  would  in  all  probability  have  been  passed.  As  the 
situation  now  stands,  Governor  Higgins  expects  to  call  an 
extra  session  of  the  Legislature,  probably  in  June.  At  that 
time  the  attention  of  the  Senate  and  Assembly  will  again 
be  called  to  the  Repeal  Bill,  and  we  have  reason  to  hope 
it  will  then  become  a  law. 

Mr.  Smith,  President  of  Mechanics  Savings  Bank,  Fish- 
kill  :  In  this  mutual  government  of  ours  in  which  we  all 
associate  on  a  basis  of  equal  right  and  joint  liability, 
where  every  man's  life  is  pledged,  if  the  needs  require,  to 
the  defence  of  the  Government  and  its  property  in  the 
ratio  that  it  may  bear  to  the  whole  of  those  needs,  no  man 
is  exempt  by  right  from  assuming  his  share  of  the  load 
and  he  must  not  shirk  it. 

The  Savings  Banks  of  this  State  have  as  depositors 
about  two  and  a  half  millions  of  people,  at  least  the  books 
show  about  this  number,  living  or  dead.  Of  this  number, 
about  four  fifths  are  confined  to  the  City  of  New  York  and 
the  counties  of  Erie  and  Albany,  leaving  about  one  fifth 
from  the  other  fifty-six  counties  of  the  State.  Of  those 
fifty-six  counties,  thirty  have  no  Savings  Banks. 

You  have  experienced  great  difficulty  recently  in  your 
efforts  to  obtain  mortgage  loans  which  are  absolutely  nec- 
essary to  you,  and  many  of  you  have  been  put  in  dire 
straits  from  mortgages  which  have  been  called  which  it 
was  difficult  for  you  to  replace. 

Your  applications  to  the  local  capitalists  have  been  met, 
we  fear,  with  opposition.  Go  over  to  your  bank  and  ask 
them  where  the  local  capitalists  are  finding  investments 
for  their  capital.  They  will  tell  you  that  they  have  daily 
applications  for  drafts  remitting  money   to   the  great 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    349 

Savings  Banks  in  New  York  whose  special  privilege 
enables  them  to  pay  a  rate  of  interest  far  in  excess  of  the 
market  value  of  money  on  securities  as  good  and  as  valu- 
able as  they  offer.  The  result  of  this  is  that  they  have 
become  the  great  refuge  of  the  tax  dodger.  The  money 
of  the  State  is  seeking  freedom  from  taxation  behind  their 
doors. 

Now,  gentlemen,  this  is  a  serious  thing  for  you  to  con- 
sider. Those  are  the  arguments  that  are  used  before  the 
Legislature.  They  not  only  go  as  far  as  this,  but  they  go 
further.  They  say  that  the  workingmen  of  this  State  are 
told  that  this  great  aggregation  of  capital  belongs  entirely 
to  them,  that  every  dollar  is  their  own.  We  cannot  wonder 
that  they  do  not  appreciate  or  comprehend  this  in  the  few 
brief  seconds  that  they  are  permitted  to  stay  in  the  mag- 
nificent temple  of  marble  and  bronze  while  they  are  making 
their  deposits,  or  that  their  shops  and  crowded  tenements 
seem  no  more  homelike  by  reason  of  a  comparison. 

Now,  gentlemen,  in  regard  to  this  bill  which  came  be- 
fore the  Legislature,  Governor  Odell,  when  he  was  in- 
augurated, was  perhaps  better  equipped  than  any  man  who 
ever  took  that  ofhce  with  a  knowledge  of  the  wants  and 
the  needs  of  the  people.  He  knew  the  feeling  of  unrest, 
the  feeling  of  dissatisfaction,  that  existed  throughout  the 
State,  what  they  considered  to  be  an  unjust  proportion 
of  the  taxation  which  they  were  bearing,  and  it  was  his 
determination,  if  possible,  to  relieve  them  from  it  under 
certain  various  methods.  He  believed  that  there  was  a 
large  number  of  people  who  were  not  paying  what  the}'' 
should  pay,  and  he  believed  that  he  could  get  enough  of 
those  to  pay  the  State  Taxes  and  divorce  the  counties 
entirely  from  taxation,  which  would  accomplish  a  very 
large  part  of  this  measure.  He  searched  the  different 
interests  to  find  means  of  taxation,  and  it  was  his  determi- 
nation to  put  no  tax  on  any  set  of  people  in  the  commu- 
nity which  should  in  any  way  be  burdensome.  The  tax 
on  Savings  Banks  was  fixed  at  one  per  cent.,  certainly  not 
enough  to  in  any  way  affect  the  amount  paid  to  the  de- 


350  HISTORY  OF  THE  SAVINGS  BANKS 

positors.  But  there  was  no  class  of  people  who  received 
that  proposal  as  did  the  Savings  Banks  people,  with  so 
much,  I  may  say,  apparent  scorn. 

This  matter  came  up  in  the  present  session.  There 
were  three  or  four  bills  introduced  in  the  early  part  of  the 
session  and  they  went  to  the  Committee  on  Taxation. 
No  effort  was  made  to  get  them  out,  and  our  friends  here, 
who  are  familiar  with  legislation,  know  that  no  bill  gets 
through,  that  the  Committee  will  not  put  it  out,  unless 
somebody  shows  the  necessity  for  it.  No  efforts  were 
made  to  get  the  bill  out  for  the  reason  that  the  Savings 
Banks  people  had  a  measure  there  far  more  important — 
the  measure  for  standardizing  the  investments  of  the 
Savings  Banks,  and  the  Committee  knew  that  they  repre- 
sented these  depositors.  For  that  reason  it  was  left  until 
the  last  day  of  the  session  and  then  passed  the  Senate, 
and  it  would  have  passed  the  Assembly  but  for  this  reason. 

In  a  caucus  of  the  Republican  Party  considering  these 
matters  of  taxation  this  was  discussed  with  other  matters, 
and  I  heard  many  men  say  that  they  believed  that  it  was 
a  party  obligation,  and  if  it  came  to  a  vote  they  would  vote 
for  it,  but  as  expressed  by  one  very  influential  leader: 
"Damn  them,  we  will  get  square  with  them  next  time." 
That  is  the  situation. 

The  members  of  the  Legislature  are  elected  to  repre- 
sent their  constituents.  Their  constituents,  in  a  great 
measure,  represent  the  great  business  interest  of  this 
State  and  represent  the  dominant  party.  WTiile  you  may 
have  obtained  a  pledge  and  they  have  carried  it  out,  I 
assure  you  that  it  will  react  on  you.  It  is  dangerous 
ground  that  you  are  treading  upon.  The  proposed  tax  is 
very  small  and  does  not  in  any  way  affect  you,  and  there 
are  thousands,  yes,  millions  of  voters  in  this  State  who  are 
equally  as  deserving  as  the  depositors  in  the  Savings 
Banks.  They  are  scattered  all  over  the  State,  on  the 
farms  and  in  the  shops.  They  are  men  who  wiU  improve 
the  State,  and  they  are  compelled  to  pay  on  the  average 
two  and  a  half  per  cent.      They  believe  it  is  unjust  that 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    351 

you  should  ask  to  take  this  small  tax  off  the  banks  and  add 
it  to  the  other  taxpayers  of  the  State. 

I  tell  you  that  there  is  a  sentiment  which  the  leaders 
cannot  control,  and  it  is  a  dangerous  position  that  you  are 
taking  in  trying  to  repeal  it. 

Mr.  Miller,  of  Utica:  The  President  of  this  Association, 
in  his  report,  called  the  attention  of  the  Association  to  the 
subject  of  railway  rate  legislation  by  the  Interstate  Com- 
merce Commission.  I  think  that  is  a  very  grave  subject, 
worthy  the  careful  consideration  of  the  Association,  and 
in  order  that  it  may  come  fully  before  the  Association  for 
discussion,  so  that  our  action  may  be  deliberate  and  such 
as  may  be  safe  for  us  and  wise,  I  offer  the  following  resolu- 
tion, which  I  will  send  to  the  table  to  be  read,  bringing 
up  that  subject. 

The  resolutions  are  as  follows : 

Whereas,  The  depositors  in  the  Savings  Banks  of  this 
State  number  approximately  2,443,000  and  the  deposits 
amount  to  $1,200,000,000,  and  the  various  Savings  Banks 
are  the  holders  of  the  securities  of  the  steam  railroads  to  the 
amount  of  about  $197,000,000  or  over  sixteen  per  cent,  of 
the  deposits,  and  the  value  of  those  securities  is  dependent 
wholly  upon  the  property  which  they  represent  earning 
an  adequate  income;  and, 

Whereas,  The  existing  statutes,  if  enforced,  provide  fully 
against  unreasonable  rates  and  preferences  or  discrimi- 
nations by  the  railroad  companies.   Now,  therefore,  be  it 

Resolved,  That  the  Savings  Banks  Association  of  the 
State  of  New  York  is  opposed  to  all  legislation  authoriz- 
ing the  Interstate  Commerce  Commission  to  fix  railroad 
rates  and  to  enforce  them  at  once,  as  tending  seriously 
to  compromise  the  earning  power  of  railroad  companies 
and  their  ability  to  meet  their  outstanding  obligations; 
and  that  this  Association  earnestly  urges  the  Government 
to  enforce  the  existing  statutes  and  thus  remedy  such  evils 
as  exist,  instead  of  conferring  additional  power  on  an  ir- 
responsible commission  which  might  be  exercised  in  a  way 
to  depreciate  Savings  Bank  investments. 


352  HISTORY  OF  THE  SAVINGS  BANKS 

Resolved,  That  these  resolutions  be  transmitted  to 
Hon.  Stephen  B.  Elkins,  Chairman  of  the  Senate  Com- 
mittee on  Interstate  and  Foreign  Commerce  and  be  sent 
to  the  Senators  and  Representatives  from  this  State. 

Mr.  W.  J.  Coombs,  President  South  Brooklyn  Savings 
Bank: 

I  hope  this  resolution  is  not  going  to  be  voted  upon 
without  thoughtful  consideration.  If  a  question  of  that 
kind  is  sprung  upon  this  meeting,  I  should  deprecate  it 
very  much.  We  have  two  great  forces  at  war  in  this 
nation  and  I  do  not  think  that  we  should,  without  proper 
consideration,  take  sides  in  that  matter. 

I  do  not  believe  in  weakening  the  hands  of  our  President 
in  the  contest  he  is  making.  I  am  a  Democrat,  but  I 
fully  appreciate  the  efforts  which  he  is  making.  I  am 
not  a  Populist,  I  would  not  confiscate  the  railroads, 
but  the  time  has  come  when,  in  the  administration 
of  their  trusts,  they  must  be  brought  to  account  to  the 
people.  In  my  service  in  Congress  I  found  out  how  they 
over-ride  the  wishes  of  the  people.  I  was  a  member 
of  the  Interstate  and  Foreign  Commerce  Commission 
when  a  pooling  bill  came  before  the  committee  for  con- 
sideration. The  counsel  for  the  railroad  company  said: 
"Give  us  this  pooling  bill  and  we  will  permit  you  to 
amend  the  Interstate  Commerce  Act."  I  said:  "What? 
Do  I  understand  you  right?  You  admit  this  Interstate 
Commerce  Act  is  defective  and  we  expect  to  impro^^e  it. 
Do  I  understand  you  to  say  that  if  the  Congress  of  the 
United  States  does  not  give  you  this  pooling  bill  that  the 
Congress  of  the  United  States  shall  not  be  permitted  to 
amend  a  defective  act?"  He  admitted  that  was  what  he 
meant.  He  said:  "You  never  have  been  able  to  do  it 
and  you  never  will  be. 

The  President  may  not  have  taken  the  right  measures, 
but  he  finds  that  out  as  he  goes  along.  Do  not  let  us  play 
into  the  hands  of  the  railroads,  who  are  not  regarding  the 
rights  of  their  stockholders,  who  are  not  regarding  the 
rights  of  the  people,  but  who  are  acting  as  an  independent 


SECRETARY,  IQOS 


WILLIAM  F.  PATTERSON 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    353 

force  and  attempting  to  ride  over  legislation  and  the  rights 
of  their  stockholders.  If  we  cannot  sustain  the  Presi- 
dent's hands  in  this  contest  do  not  let  us  weaken  them.  I 
shall  object  to  that  as  far  as  lies  in  my  power.  Although 
a  Democrat,  representing  a  Democratic  constituency 
when  I  was  in  Congress,  I  hold  that  this  is  a  weaken- 
ing of  the  hands  of  the  Executive  of  the  nation  if  any 
action  is  taken,  unless  it  be  by  the  whole  body  of  the 
Association. 

The  resolution  was  on  motion  referred  to  the  Executive 
Committee  for  subsequent  action. 

ADDRESS   OF  PRESIDENT   STRYKER,    OF   HAMILTON 
COLLEGE 

President  Stryker,  of  Hamilton  College,  addressed  the 
Convention,  in  part,  as  follows: 

Mr.  President  and  Gentlemen:  My  experience  so  far 
has  not  shown  me  that  talking  to  bankers  does  much  good. 
I  find  that  they  always  seem  to  have  their  minds  made  up 
in  various  theories  of  their  own  that  could  not  always  coin- 
cide with  mine,  and  they  have  an  alacrity  in  saying  yes  or 
no,  but  usually  no. 

I  want  to  speak  to  you  about  three  things  in  which,  it 
seems  to  my  mind,  with  our  enthusiasm  and  knowledge 
as  American  men,  we  can  share  and  share  alike.  It  is 
wonderful  how,  taking  a  train  in  the  evening  and  passing 
through  two  or  three  hundred  miles  of  latitude  in  the 
night,  you  awaken  to  find  yourself  suddenly  in  a  new 
world  of  leafage  and  blossom.  For  these  imaginary  lines 
of  latitude  which,  after  all,  are  our  attempts  to  put  climate 
upon  the  map,  and  sleeping  or  dreaming  as  we  go,  how 
many  mornings  are  there  that  we  awaken  and  find  our- 
selves in  a  new  world?  To  my  thinking,  this  world  was 
never  so  attractive,  so  romantic,  so  dramatic,  so  inviting 
as  it  is  to-day,  and  in  the  spirit  of  this  particular  thing 
which  I  shall  call  international,  a  matter  of  which  we  are 


354  HISTORY  OF  THE  SAVINGS  BANKS 

not  fully  aware  unless  we  have  given  it  sharp  and  close  at- 
tention. 

If  there  is  anything,  gentlemen,  that  is  international, 
it  is  finance,  and  expensive  war  on  the  other  side  of  this 
sphere  temporarily  seems  to  aid  us,  but  all  the  world  over 
mankind  pays  the  ultimate  bill.  It  may  be  indirect,  but 
it  is  sure.  By  that  hydrostatic  paradox  in  which,  as  you 
recall,  water  flowing  from  any  source  into  different-shaped 
vessels  rises  at  last  to  just  the  same  height  in  each,  so  it 
is  with  the  world:  the  whole  round  world  is  for  man's 
resources.  He  rules  the  wires  and  the  wireless  currents 
of  the  air  which  are  binding  and  belting  this  world  fast 
together  internationally.  You  may  like  it  or  you  may 
dislike  it,  but  for  my  part  I  believe  that  it  is  the  province 
of  Almighty  God  at  this  present  time  to  form  a  unity  and 
create  a  solidarity  of  the  races.  Let  us  be  big  and  not 
little;  let  us  not  be  like  the  ostrich  and  put  our  heads  in 
the  sand.  I  think  we  are  taught — at  least  we  ought 
to  be  taught — that  the  white  race  is  no  special  favorite 
of  God  Almighty  in  any  such  sense  as  that  it  can 
successfully  work,  even  with  its  adverse  possession  of 
the  world,  against  that  eminent  domain  which  belongs  to 
man  as  man. 

I  am  prepared  to  stand  by  this  dogma  that  democracy 
is  that  form  of  housekeeping  for  men,  which  we  call 
government,  in  which  every  man  counts  one;  not  two, 
not  one  and  a  half,  not  a  half  of  one,  but  one,  as  a  man. 
Bismarck  said  that  "the  best  government  is  a  benevo- 
lent despotism,"  to  which  Matthew  Arnold  replied:  "it 
is  against  the  instinct  of  mankind;  human  nature  fights 
it." 

Gentlemen,  it  is  the  genius  of  the  race  and  of  the  spirit 
of  that  freedom  of  which  we  are  all  a  part,  and  in  which 
we  all  share,  to  be  governed  by  courts,  not  by  presidents, 
not  by  governors,  not  by  legislators,  but  by  the  judges, 
and  Anglo-Saxon  freedom  finds  its  incarnation  and  type 
upon  the  bench.  This  or  this  may  make  the  laws,  this 
or  this  may  sign  them,  but  at  last  the  judge,  sitting  there 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    355 

as  the  incarnation  of  the  public  purpose,  of  rational 
equity,  sitting  there  as  the  embodiment  and  representa- 
tion of  the  people's  conscience,  says  whether  this  is  or  is 
not  law. 

That  we  may  be  preserved  from  the  terrors  of  wild 
individualism,  or  that  we  may  be  preserved,  on  the  other 
hand,  from  corporate  rapacity,  which  does  to  the  many 
what  it  would  scorn  to  do  to  the  one,  so  neither  in  bulk 
nor  in  detail  shall  any  man,  or  company  of  men,  in  all  this 
wide  land  be  outside  of  the  law,  be  above  the  law,  or  be 
beneath  the  law.  That  is  Anglo-Saxon  freedom.  That 
is  Americanism.  America  is  the  land  of  the  judge,  the 
land  of  men,  the  land  that  cares  for  all  lands  all  over  the 
world  and  believes  that  freedom  is  of  no  latitude,  of  no 
longitude,  that  feels  that  which  concerns  any  man  is  the 
concern  and  duty  of  every  man. 

I  think  we  should  be  thankful  for  our  problems,  duties, 
and  privileges — for  surely  are  not  our  duties  our  privileges 
that  in  these  days  are  thrust  upon  us — when  we  think 
how  much  and  how  sure  and  fast  we  cannot  say  any  more. 
Every  life  is  measured  by  what  it  feels,  and  bears,  and 
wins,  not  by  its  mere  duration. 

ADDRESS  OF  COLONEL  WILLIAM  GARY  SANGER 

Gentlemen :  When  I  received  your  very  kind  invitation 
to  come  here  to-day  I  accepted  it  with  the  greatest  pleas- 
ure, not  only  because  I  have  a  warm  personal  regard  for 
your  President  and  Mr.  Miller,  of  your  Executive  Com- 
mittee, through  whom  your  invitation  came  to  me,  but 
also  because  I  feel  it  a  very  great  privilege  to  meet  a  body 
of  men  who  are  engaged  in  the  work  of  caring  for  billions 
of  dollars  and  who  are  doing  that  work  without  a  thought 
of  personal  profit  or  selfish  gain. 

The  fact  is  that  in  this  work  of  such  far-reaching  im- 
portance you  have  maintained  ideals  which  are  in  our  day 
sometimes  forgotten,  not  only  by  the  depositors  in  your 
banks,  but  the  entire  community  to  whom  your  work  is 
a  wholesomic  and  helpful  lesson.     This  line  of  thought  has 


356  HISTORY  OF  THE  SAVINGS  BANKS 

shaped  in  my  mind  the  subject  upon  which  I  want  to  speak 
to  you  briefly  to-day. 

Certainly  some,  and  possibly  all  of  you,  will  agree  with 
me  when  I  say  that  there  is  not  a  civilized  country  in  the 
world  where  there  is  so  little  respect  for  law  as  in  the 
United  States.  I  do  not  refer  to  that  sullen,  dogged 
determination  to  oppose  the  settled  rules  of  society  which 
we  see  in  the  professional  law-breaker  or  criminal,  but  I 
refer  to  a  widespread  lack  of  respect,  reverence,  and  honor 
for  law  as  law. 

V/hen  any  law  or  any  statute  is  brought  to  the  attention 
of  an  individual,  it  is  not  uncommon  for  him  to  submit 
it  to  his  personal  judgment.  If  it  runs  counter  to  his 
interests,  or  to  his  pleasure,  if  it  seems  unwise,  or  falla- 
cious, or  ill-advised,  sometimes  he  plans  to  evade  it  and 
at  other  times  he  draws  a  mental  re-line  through  it,  and 
for  him  it  is  as  if  that  law  did  not  exist. 

Take  the  excise  law.  I  do  not  suppose  there  is  any 
city,  village,  or  hamlet  throughout  the  length  and  breadth 
of  this  State  where  the  excise  law  is  not  secretly  and  al- 
most openly  violated.  Take  the  law  which  affects  the 
homecoming  traveller  from  Europe  with  his  purchases. 
It  was  plain  and  simple,  but  the  man  who  complied  liter- 
ally with  the  provisions  of  that  law  was  considered  by 
many  a  crank  or  certainly  an  exception  to  a  very  general 
rule.  And  so  it  runs  throughout  all  the  many  ways  in 
which  the  statutes  affect  us.  I  shall  not  attempt  to  say 
that  we  all  have  this  disregard  of  the  law,  but  I  do  say  that, 
in  my  opinion,  there  is  one  cause  which  frequently  and 
materially  contributes  to  it,  and  that  is  a  lack  of  respect 
for  the  sources  of  our  laws.  Rightly  or  wrongly,  there  is  a 
general  feeling  of  distrust  of  most  of  our  State  legislators. 
How  many  legislative  bodies  are  there  in  the  whole  length 
and  breadth  of  our  country,  in  all  the  States  from  one 
ocean  to  the  other,  who  have  the  absolute  confidence  and 
trust  of  the  community  whom  they  represent?  We  are 
confronting  a  disagreeable  dilemma.  Is  it  that  the  com- 
munities have  improperly  suspected  men  who  are  not 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    357 

deserving  of  reproach,  or  is  their  estimate  of  these  men 
accurate?  The  moral  turpitude  involved  in  either  horn  of 
the  dilemma  is  unpleasant  to  think  of. 

Without  attempting  to  go  into  all  the  causes  which 
affect  the  esteem  in  which  we  hold  our  legislators,  I  want 
to  say  that,  in  my  opinion,  there  is  one  cause  bearing 
directly  upon  our  interests,  and  that  is  the  secret  use  of 
money  in  our  political  life.  I  do  not  believe  that  it  would 
be  possible  for  one  man,  or  for  any  body  of  trustees,  to 
conduct  a  hospital,  a  library,  or  a  church  and  receive  a 
sum  of  money  from  an  unknown  source  and  disburse  it 
without  avoiding  scandal  and  suspicion,  and  yet  that  is 
the  way  in  which  our  political  canvasses  are  conducted. 

We  must  never  forget  that  it  takes  large  sums  of  money 
to  conduct  a  political  campaign.  It  takes  money,  un- 
fortunately, to  carry  on  almost  any  kind  of  work.  But 
practically,  if  we  want  to  interest  ourselves  in  some  ques- 
tion that  bears  directly  upon  our  political  life,  it  seems  to 
me  that  one  of  the  most  important  things  for  us  to  do  is 
to  use  our  influence  in  the  direction  of  demanding,  or  in 
the  effort  to  draw  from  the  public  a  sentiment  that  will 
demand,  a  law  which  will  do  away  with  the  secret  use 
of  money  in  our  political  life.  These  are  but  one  or  two 
points  in  regard  to  which  there  is  need  to-day  for  action 
on  the  part  of  the  people.  Whatever  conditions  we  may 
find  that  we  think  wrong  or  improper,  we  must  not  forget 
that  they  exist  by  the  will  of  the  people.  Our  Govern- 
ment is  not,  as  some  men  sometimes  think,  inevitably  the 
best  in  the  world.  It  differs  from  other  governments  in 
that  we  can  make  any  kind  of  government  we  want.  We 
can  make  it  as  bad  or  as  good  as  we  want  it,  and  in  that 
lies  the  responsibility  to  which  Dr.  Stryker  has  referred. 
Upon  every  man  rests  the  burden  and  the  duty  of  doing 
what  he  can  to  bring  about  better  conditions. 

In  the  literature  of  the  Christian  Church  there  is  a 
sentence  which  I  wiU  modify :  "  It  is  not  by  the  good  votes 
of  a  nation  that  you  make  it  grow,  but  by  strengthening 
the  soul  of  the  nation."     And  so  what  we  need  to-day  is  a 


358  HISTORY  OF  THE  SAVINGS  BANKS 

quickening  of  the  public  conscience,  an  uplifting  of  our 
public  standards,  and  the  strengthening  of  the  hearts  of 
the  nation. 

As  I  think  of  these  evils,  I  am  reminded  of  a  story  of 
Lincoln.  When  he  was  a  young  man  he  witnessed  the 
sale  of  human  beings  on  the  auction  block.  That  custom 
was  warranted  by  law  and  was  justified  from,  the  pulpit; 
but  the  instinctive  sense  of  right  and  wrong  of  that  young 
man  made  it  plain  to  him  that  it  was  an  outrage,  and  he 
said:  "If  my  life  is  spared  I  will  hit  that  some  time,  and  I 
will  hit  it  hard."  And  Providence  permitted  him  to 
strike  that  blow.  But  he  never  could  have  struck  it  if 
he  had  not  had  back  of  him  the  hundreds  of  thousands  of 
people  who  made  it  possible  for  him  to  carry  out  the  wish 
which  was  in  their  hearts. 

The  doctor  has  said  that  we  live  in  an  interesting  time. 
Certainly  our  days  are  full  of  interest.  We  see  these  dis- 
agreeable features  of  our  life  manifesting  themselves  in 
one  way  or  another,  and  yet  it  seems  to  me  there  is  no 
room  for  pessimism.  We  get  better  all  the  time.  The 
very  spirit  of  public  conscience  which  makes  us  resent 
these  conditions  is  in  itself  a  helpful  sign.  It  means  that 
we  must  live  up  to  the  responsibilities  of  our  day.  We 
have  before  us  a  fight  which  cannot  be  successfully  con- 
ducted without  the  aid  of  every  man.  It  is  a  hard  fight, 
but  it  is  worth  the  making  because  the  victory  is  one  that 
we  must  win. 

In  1900  I  was  in  Switzerland  writing  a  report  for  Presi- 
dent McKinley  on  the  Swiss  military-  system.  One  day, 
in  the  month  of  August,  a  young  Swiss  ofiQcer,  looking  at 
the  distant  mountains  capped  with  snow  and  beautiful 
in  the  light  of  the  setting  sun,  said  to  me:  "It  is  a  land 
worth  fighting  for." 

Not  in  the  spirit  of  any  desire  to  meet  a  powerful  foe 
on  our  frontier,  nor  to  meet  a  hostile  fleet  threatening  us 
with  bombardment,  but  in  the  spirit  of  true  American 
democracy  and  patriotism,  in  a  spirit  which  recognizes 
the  strength  of  the  evils  which  are  to  be  overcome,  and 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    359 

which  recognizes  the  force,  the  energy,  and  the  sense  of 
duty  that  is  capable  of  being  put  into  that  fight,  I  beHeve 
that  every  American  can  say  to-day,  as  he  thinks  of  our 
institutions  and  our  national  life:  "It  is  a  land  worth 
fighting  for." 


CHAPTER  XIII 

Thirteenth  Annual  Convention — Address  of  President  Wm.  B.  Van 
Rensselaer — Report  on  the  Attempted  Repeal  of  the  Franchise 
Tax — Address  on  New  York  City's  Credit  by  Mr.  Frank  A.  Van- 
derlip — Professor  Taussig's  Address  on  "  Reform  in  Currency/' 

l^T  THE  opening  of  the  Thirteenth  Annual  Conven- 
/-^    tion,  held  on  May  9, 1906,  President  William  Bay- 
"**  ard  Van  Rensselaer  welcomed  the  delegates  in  the 
following  words : 

PRESIDENT   WILLIAM   B.    VAN   RENSSELAER's   ADDRESS 

In  this  address  I  intend  to  refrain  from  trespassing  in 
any  way  on  the  reports  that  will  follow  in  the  due  course 
of  our  business;  but  I  am  sure  it  will  be  interesting  to 
you  all  to  hear  that  on  January  i,  1906,  the  one  hundred 
and  thirty  (130)  Savings  Banks  of  this  State  had  2,669,779 
open  accounts,  a  gain  for  the  past  year  of  126,247,  Also, 
that  during  the  year  1905,  the  amount  due  depositors 
from  the  Savings  Banks  of  this  State  has  increased  over 
$93,000,000.  While  this  growth  is  very  much  larger  than 
that  in  any  previous  year,  yet  the  surplus  computed  on 
the  market  value  of  investments  has  increased  during  the 
past  year  less  than  $600,000. 

On  the  floor  of  the  Senate  in  Albany  this  winter.  Sen- 
ator Lewis  made  a  statement  in  his  speech  against  the 
repeal  of  the  tax  on  the  franchise  of  Savings  Banks  that  in 
1901,  the  year  in  which  the  tax  was  imposed,  the  surplus 
of  Savings  Banks  of  the  State  was  about  $70,000,000  and 
now  amounts  to  over  $85,000,000.  This,  he  said,  proved 
that  the  tax  was  no  burden  to  the  banks.  While  these 
figures  are  correct,  so  far  as  the  par  value  of  the  suq^lus 

360 


HISTORY  OF  THE  SAVINGS  BANKS  ASSOCIATION  361 

is  concerned,  yet  we  all  know  that  the  par  value  of  the 
surplus  does  not  represent  the  real  value,  and  that  we  pay- 
little  attention  to  the  par  value  except  in  connection  with 
the  tax.     Let  me  give  the  actual  conditions. 

On  January  i,  1901,  the  amount  due  depositors  was 
$947,139,638.90.  The  surplus  computed  on  the  market 
value  of  the  assets  at  that  time  was  $118,294,674.25. 
This  represents  about  twelve  and  one  half  per  cent,  of  the 
deposits. 

On  January  i,  1906,  the  amount  due  depositors  was 
$1,292,358,866.96.  The  surplus  computed  on  the  market 
value  of  the  assets  was  $112,834,424.92,  which  represents 
eight  and  seven  tenths  per  cent,  of  the  deposits;  a  shrink- 
age in  percentage  of  from  twelve  and  one  half  to  eight  and 
seven  tenths  per  cent.  This  market  value  of  the  surplus 
was  then  nearly  $5,500,000  less  than  the  amount  held  by 
the  banks  before  the  tax  was  imposed.  During  this 
period  (and  including  what  must  be  paid  July  ist)  the 
tax  amounts  to  over  four  and  one  half  millions  of  dollars. 

The  Chairman  of  the  Executive  Committee  will  report 
what  has  been  done  in  the  effort  to  repeal  the  Franchise 
Tax,  and  it  will  be  for  you  to  decide  whether  it  is  desir- 
able and  good  policy  to  continue  this  work.  I  am  thor- 
oughly convinced  that  it  would  be  a  mistake  to  do  so,  if  it 
necessitates  the  dragging  of  our  Association  into  party 
politics.  We  should  keep  as  free  in  the  future  as  we  have 
in  the  past  from  allying  ourselves  with  any  political  party. 
Should  the  Savings  Banks  Association  endorse  either  of 
the  political  parties  because  that  party  has  given  or 
promises  to  give  pledges  to  repeal  the  Franchise  Tax,  I 
think  it  would  make  a  great  blunder  and  would  endanger 
the  continuance  of  the  Association  itself.  As  Savings 
Banks  generally  expect  to  hold  to  maturity  the  securities 
they  buy,  the  par  value  of  the  assets  is  of  little  concern;  so 
also  is  the  market  value,  unless  they  have  occasion  to  sell 
securities.  But  the  real  interest  and  vital  question  is  to  be 
sure  that  the  securities  are  carried  on  the  basis  at  which 
they  were  purchased,  so  that  the  premiums  paid  on  the 


362  HISTORY  OF  THE  SAVINGS  BANKS 

purchase  of  securities  shall  be  credited  back  to  the  prin- 
cipal account  before  the  maturity  of  the  bonds.  The 
Executive  Committee  will  make  important  recommenda- 
tions on  this  subject  which  I  hope  will  be  thoroughly  dis- 
cussed. 

The  Executive  Committee  will  also  report  why  it  was 
necessary  to  amend  the  General  Investment  Law  this 
year.  It  is  believed  that  the  law  is  now  as  nearly  perfect 
as  it  is  possible  to  be  made,  and  I  hope  that  our  Association 
will  not  have  to  ask  the  Legislature  to  further  amend  this 
law,  but,  on  the  contrary,  will  be  able  to  prevent  its 
amendment  by  other  interests. 

As  an  Association  we  took  no  part  in  the  agitation 
regarding  the  substitution  of  a  recording  tax  instead  of  an 
annual  tax  on  mortgages;. but,  if  this  bill  is  signed  by  the 
Governor,  I  believe  it  will  be  a  great  improvement  on  the 
present  law  and  will  be  of  great  benefit  to  the  Savings 
Banks  as  well  as  to  the  real  estate  interests  of  the  State. 


REPORT   ON   FRANCHISE   TAX 

The  following  report  on  the  Franchise  Tax  was  read 
by  Mr.  Wm.  H.  S.  Wood,  Chairman  of  the  Committee: 

We  find  that  very  many  men  throughout  the  State  do 
not  understand  why  a  tax  should  not  be  levied  upon  Sav- 
ings Banks  in  the  State  of  New  York  when  they  are  so 
universally  imposed  in  other  States ;  and  few  take  the  time 
and  trouble  necessary  to  investigate  the  Savings  Bank 
laws,  especially  of  the  New  England  States,  which  differ 
so  radically  from  those  of  the  State  of  New  Y^ork,  in  the 
comparative  freedom  of  investment  which  they  permit, 
and  which  enable  the  Savings  Banks  in  these  States  to 
earn  a  larger  income  than  those  of  the  State  of  New  York. 

For  the  second  time  the  Legislature  has  adjourned  and 
we  have  failed  in  accomplishing  our  purpose.  To  any 
one  who  has  followed  the  course  of  legislative  proceedings 
the  past  two  years  it  is  plainly  manifest  that  our  failure 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    363 

to  pass  our  bill  has  been  in  consequence  of  the  split  in  the 
dominant  political  party  which  at  present  controls  the 
Legislature  of  the  State;  and  the  failure  of  our  Repeal 
Bill  this  year  was  clearly  the  result  of  such  fractional 
contest. 

From  the  opening  of  the  Legislature  in  January  last 
everything  seemed  to  promise  favorable  action  for  us, 
but  nearly  at  the  close  of  the  session  the  bitter  feeling, 
which  had  been  growing,  culminated  in  a  personal  attack 
upon  the  proposer  of  the  Franchise  Tax  Repeal  Bill,  and 
it  was  consequently  finally  killed  beyond  resurrection  at 
this  time. 

Your  Committee  believes  that  the  Association  should 
continue  the  fight ;  a  personal  canvass  of  its  members  shows 
an  almost  unanimous  judgment  in  this  direction.  This 
tax  is  the  first  serious  attack  upon  the  money  of  the  poor 
of  the  State,  held  as  a  sacred  tnist  by  the  Savings  Banks; 
we  have  no  right  to  shirk  the  responsibility  they  have 
reposed  in  us.  The  poor,  whose  money  we  hold,  cannot 
organize  and  fight  for  their  rights;  we  can,  and  it  is  our 
duty  to  protect  them.  Consequently,  your  Committee 
respectfully  recommends  to  the  Association  that  the  con- 
test be  carried  on  until  success  crowns  our  efforts. 

NEW  YORK   city's   CREDIT 

The  following  address  was  given  by  Mr.  Frank  A. 
Vanderlip,  Vice-President  of  the  National  City  Bank, 
New  York: 

Such  a  meeting  as  this,  of  Savings  Bank  officials, 
offers  a  peculiarly  appropriate  place  to  discuss  the  credit 
of  the  City  of  New  York.  The  institutions  you  represent 
hold  not  less  than  $122,000,000  of  the  debt  obligations  of 
this  city.  These  bonds  have  been  regarded  as  eminently 
safe  and  as  a  proper  security  for  the  investment  of  trust 
funds.  Trustees  have  looked  upon  city  bonds  as  U  secur- 
ity against  which  no  criticism  could  properly  be  raised. 


364  HISTORY  OF  THE  SAVINGS  BANKS 

New  York  people  have  had  such  high  regard  for  New  York 
City  bonds  that  in  the  main  the  entire  outstanding  in- 
debtedness is  held  within  the  city  itself. 

There  is,  then,  ample  reason  why  there  should  be  among 
such  a  body  of  men  as  is  gathered  here  no  misconceptions 
about  the  credit  of  the  City  of  New  York.  There  should 
be  no  errors  of  judgment  concerning  the  safety  of  the 
city's  obligations.  There  should  be  no  lack  of  informa- 
tion in  regard  to  the  essential  conditions  surrounding  the 
security.  There  should  be  a  clear  comprehension  of  the 
purposes  for  which  this  debt  is  created,  and  of  the  means 
which  have  been  taken  to  insure  its  redemption. 

The  conceptions  of  all  of  us  are  largely  influenced  by 
newspaper  headlines.  Any  one  whose  opinions  are  so 
shaped  must  recently  have  come  to  the  conclusion  that 
there  is  something  radically  wrong  with  the  financial 
position  of  New  York.  During  the  last  few  weeks  we 
have  repeatedly  read  of  the  legacy  of  $700,000,000  or 
more  of  indebtedness  which  Mayor  McClellan  is  likely  to 
leave  to  his  successor.  It  has  been  pointed  out  that  the 
debt  of  the  city  during  the  seven  years  since  its  consoli- 
dation has  increased  from  $225,000,000  to  more  than 
$600,000,000.  We  have  been  adjured  that  municipal 
expenditures  must  cease.  We  have  been  warned  that  we 
are  already  close  to  the  debt  limit.  It  has  been  pointed 
out  that  the  city  has  been  piling  up  debt  obligations  at  the 
rate  of  more  than  $1,000,000  a  week  for  future  adminis- 
trations to  deal  with,  and  that  soon  expenditure  must 
halt,  perforce,  because  the  constitutional  limit  of  maxi- 
mum lawful  indebtedness  will  be  reached.  It  is  not 
alone  in  newspaper  headlines,  however,  that  basis  is  to 
be  found  for  pessimistic  views  regarding  the  credit  of 
New  Yorji  City.  The  combined  judgment  of  investors, 
as  reflected  in  the  market  quotations  for  New  York  City 
bonds,  has  been  telling  a  disturbing  story.  Some  years 
ago  the  city  was  able  to  float  $9,000,000  of  bonds  bearing 
two  and  one  half  per  cent,  interest,  and  sell  them  at  par 
or  above.     Then  its  credit  position  changed.     It  was 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    365 

forced  to  issue  three  per  cent,  bonds,  then  three  and  one 
half  per  cent.,  and  recently  it  has  found  it  no  longer 
possible  to  put  out  three  and  one  half  per  cent,  bonds  and 
the  rate  has  been  advanced  to  four  per  cent.,  a  rate  beyond 
which  the  charter  limitations  will  not  permit  the  city  to 
borrow  money.  These  four  per  cent,  bonds  were  sold  at 
a  premium,  but  the  market  has  not  been  buoyant,  and 
the  pessimists  believe  the  next  issue  offered  will  probably 
go  for  a  less  premium  than  did  the  recent  issue.  This 
changed  condition,  this  increasingly  unfavorable  basis 
upon  which  the  city  is  forced  to  sell  its  bonds,  is  of  course 
due  in  some  measure  to  a  changed  situation  in  the  money 
market  itseK.  The  rate  for  money,  however,  by  no  means 
fully  accounts  for  the  present  state  of  the  market's  meas- 
ure of  the  city's  credit.  There  are  to-day  many  railroad 
bonds  selling  at  higher  prices  than  the  bonds  of  the  City 
of  New  York,  although  the  railroad  bonds  possess  none  of 
the  extremely  favorable  tax  exemption  features  which  city 
bonds  have. 

Why  is  this?  What  is  the  reason  that  this  imperial 
city,  growing  as  is  no  other  city  in  the  world  in  numbers 
and  in  wealth,  finds  its  obhgations  regarded  by  investors 
with  increasing  disfavor?  The  city  has  a  record  of  ab- 
solutely unbroken  pledges ;  no  investor  was  ever  forced  to 
wait  a  day  for  payments  due  from  it. 

Sinking  funds  have  been  established  which  will  pro- 
vide for  the  redemption  of  every  outstanding  security. 
The  continuity  of  the  city's  finances  is  well  illustrated  by 
the  fact  that  some  of  these  sinking  funds  date  back  for 
their  authorization  to  the  laws  of  1844.  Through  all  the 
changes  of  municipal  life  since  that  time  the  pledges  of 
these  sinking  funds  have  been  kept  inviolate.  Indeed, 
the  chief  concern  about  some  of  the  sinking  funds  has 
been  the  problem  of  handling  a  surplus  vastly  greater 
than  the  early  city  administrators  reckoned  as  possible, 
and  far  greater  than  the  requirements  of  the  fund.  Much 
of  the  new  indebtedness  of  recent  years  has  been  issued  to 
pay  for  municipal  undertakings  which  have  been  distinct 


366  HISTORY  OF  THE  SAVINGS  BANKS 

financial  successes.  A  great  sum  has  been  spent  for 
rapid  transit,  and  the  vital  problem  of  the  subway  to-day 
is  connected  with  the  efforts  to  handle  a  traffic  larger  than 
the  most  enthusiastic  projectors  of  the  tunnel  imagined 
possible. 

In  view  of  all  these  facts,  this  declining  state  of  public 
credit  would  seem  then  to  be  more  than  an  ordinary 
financial  puzzle.  Where  shall  we  look  for  the  answer? 
The  answer  is  to  be  found  in  a  single  fact.  The  sole  basis 
for  an  unfavorable  view  of  the  credit  of  the  City  of  New- 
York  lies  in  the  lack  of  a  clear  understanding  of  the  true 
strength  of  New  York's  financial  position.  A  careful 
analysis  of  the  finances  of  the  city  and  a  fair  appreciation 
of  the  political  considerations  affecting  the  city's  credit 
must  lead  one  to  the  conclusion  that  the  growing  disfavor 
which  in  recent  days  investors  have  shown  toward  city 
obligations  is  unwarranted. 

The  results  of  an  exhaustive  examination  of  that  sort 
cannot,  of  course,  be  set  forth  in  the  limits  of  a  brief 
address.  We  may,  however,  look  at  some  of  the  main 
points  against  which  criticism  is  leveled.  There  is  a 
popular  conception  that  the  debt  of  the  city  has  about 
reached  $700,000,000.  That  figure  is  compared  in  the 
public  mind  with  the  total  interest-bearing  debt  of  the 
United  States  which  stands  at  less  than  $900,000,000  or 
$11  per  capita,  and  the  comparison  is  fatal  to  a  reputation 
for  conservatism  on  the  part  of  city  administrators.  W^e 
forget  in  the  first  place  that  the  debt  of  the  United  States, 
being  abnormally  small,  offers  no  fair  comparison.  The 
debt  of  France,  for  instance,  is  $150  per  capita,  yet 
French  rentes  sell  on  a  three  per  cent,  basis. 

This  great  total  of  $700,000,000  of  city  indebtedness, 
however,  will  fade  away  in  rather  a  surprising  manner 
under  the  light  of  a  little  analysis.  It  is  true  that  the 
actual  figures  of  outstanding  obUgations  are  to-day  about 
$625,000,000,  and  there  will  certainly  be  further  issues  of 
bonds  during  this  year.  The  $700,000,000  total,  there- 
fore, would  not  at  first  glance  seem  to  be  far  away. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    367 

Taking  the  situation  at  the  beginning  of  the  present 
year,  that  being  the  latest  date  for  which  detaU  figures  can 
be  had,  we  find  the  gross  funded  debt  standing  at  just 
$600,000,000.  We  must  at  once  cut  off  $170,000,000 
from  that,  however,  for  the  city  holds  that  amount  of  its 
own  bonds  in  its  own  treasury  to  the  credit  of  the  various 
sinking  funds.  A  total  of  $430,000,000  of  outstanding 
funded  debt  does  not  look  so  great  for  a  city  of  4,000,000 
people,  but  that  amount  may  still  be  reduced.  We  may 
now  make  a  further  reduction  of  $135,000,000  of  bonds, 
for  the  payment  of  which  specific  revenues  were  pledged 
long  before  the  creation  of  Greater  New  York.  These 
revenues  are  to-day  much  larger  than  are  necessary  for 
the  purpose,  and  no  taxpayer  will  be  called  upon  to  con- 
tribute, by  direct  taxation,  one  doUar  for  their  redemption. 
That  brings  our  total  down  to  $295,000,000,  but  we  may 
make  further  reductions.  Of  that  amount  $46,000,000 
bonds  were  issued  to  provide  funds  to  build  the  subway. 
No  one  doubts  that  the  rapid  transit  property  is  valuable 
enough  to  take  care  of  that  obligation.  No  one  believes 
that  there  is  need  for  these  bonds  to  become  a  direct  bur- 
den upon  taxpayers.  This  brings  us  down  to  $249,000,000, 
but  this  $249,000,000  of  obligations  was  not  incurred 
without  a  great  increase  of  the  city's  real  property.  There 
has  been  value  received.  There  is  included  in  that  total 
bonds  issued  for  dock  "purposes.  The  income  from  the 
city's  docks  to-day  produces  a  net  return  equal  to  paying 
the  interest  on  $50,000,000  of  dock  bonds  and  providing 
fully  for  a  sinking  fund  for  their  retirement.  There  are 
then  materially  less  than  $250,000,000  of  bonds,  the  in- 
terest and  sinking  fund  requirements  of  which  must  be 
provided  for  by  direct  taxation. 

That  is  the  real  debt  whose  burden  is  felt  by  the  tax- 
payers. It  is  only  one  third  of  the  sum  that  is  featured 
in  the  newspaper  headlines  and  is  in  the  public  mind.  It 
ought  to  be  regarded  as  a  small  obligation  for  a  city  of 
such  resources  and  with  such  a  population. 

Let  us  look  for  a  moment  at  the  other  side  of  the  ac- 


368  HISTORY  OF  THE  SAVINGS  BANKS 

count.  What  is  the  character  of  the  municipal  corpo- 
ration that  has  created  this  debt  and  pledged  it  its  faith 
and  credit  for  its  payment?  In  intelligence  and  financial 
integrity  surely  it  is  a  community  which  can  challenge 
comparison.  The  increase  of  the  city  debt  may  have 
been  rapid,  but  nowhere  else  on  earth,  at  any  time  in 
histor>%  can  be  found  so  great  an  increase  in  the  value  of 
property  as  has  been  recorded  here  in  the  last  half-dozen 
years.  Nowhere  else  is  there  a  city  growing  so  fast  in 
numbers,  and  nowhere  else  are  building  activities  so  great 
or  so  substantial.  If  we  regard  the  city's  obligations  as 
large,  let  us  look  at  the  income.  The  income  of  the  City 
of  New  York  to-day  is  one  sixth  of  the  income  of  the 
National  Government.  The  revenue  of  New  York  City 
to-day  is  greater  than  had  been  the  revenue  of  the  whole 
National  Government  in  any  year  in  its  history  up  to 
1864.  One  sixth  of  the  entire  banking  resources  of  the 
nation  is  centred  in  this  city.  We  have  here  the  finan- 
cial centre  of  the  country,  and  in  any  real  crisis  vitally 
concerning  the  financial  integrity  of  the  city's  obligations, 
the  potent  weight  of  sound  financial  judgment  that  would 
be  developed  would  be  overwhelming.  But  it  may  be 
argued  that  there  are  socialistic  tendencies  in  politics 
and  graft  in  public  life,  and  that  New  York  City  offers 
flourishing  examples  of  both  developments.  If  one  granted 
all  that  and  admitted  that  their  manifestations  may 
become  tenfold  what  they  are  to-day,  I  believe  there 
would  still  be  absolute  security  behind  the  city's  bond 
issues.  Let  the  man  who  questions  the  strength  of  a 
New  York  City  bond  study  the  charter  provisions  of 
Greater  New  York.  He  will  be  surprised  at  the  safe- 
guards which  have  been  irrevocably  thrown  about  the 
integrity  of  the  city's  obligations.  W^e  learned  our  lessons 
from  the  Tweed  Ring.  There  is  about  the  same  relative 
comparison  between  the  ease  with  which  the  city  could 
be  robbed  in  the  early  seventies  and  the  difficulties  in  the 
way  of  municipal  dishonesty  to-day  that  there  is  between 
the  ease  with  which  a  burglar  could  open  the  ordinary 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    369 

tin  box  of  an  investor  and  the  difificulties  which  he  would 
meet  in  trying  to  enter  one  of  our  modern  armor-plate 
vaults  with  its  series  of  time  locks  and  electrical  protection. 

It  is  true,  I  presume,  that  there  is  a  graft  to-day.  The 
expenditure  of  some  of  the  money  that  has  been  raised 
from  these  issues  of  the  city's  obligations  has,  in  some  in- 
stances, been  unwise,  in  some  extravagant,  in  some  dis- 
honest. Granting  the  very  worst  of  all  that,  however, 
we  still  have  a  situation  in  wliich  the  city's  integrity  is 
safeguarded  by  charter  provisions  of  such  character  that 
the  city's  obligations  are  among  the  most  secure  of  those 
issued  by  any  body  politic  in  the  world. 

There  is  not  time  here  to  detail  these  charter  provisions, 
but  I  am  certain  if  there  is  any  one  among  you  who  is 
timid  about  the  effect  of  future  political  upheavals  upon 
New  York  City's  financial  integrity,  he  will  be  surprised, 
upon  studying  this  subject,  to  learn  how  completely  the 
city's  credit  has  been  guarded  from  being  wrecked  by  any 
temporary  waves  of  politics.  Not  a  bond  can  be  issued 
unless  the  authorities  at  the  same  time  provide  a  tax  which 
will  pay  its  interest  and  maintain  an  adequate  sinking 
fund  for  redemption.  No  subsequent  administration  can 
fail  to  levy  sufficient  taxes  to  meet  that  service.  The 
accounts  of  each  sinking  fund  are  kept  separate  and  dis- 
tinct, and  the  rights  of  the  holders  of  the  various  issues 
are  strictly  preserved. 

Between  the  city  and  its  creditors  the  charter  has 
declared  that  there  is  an  absolute  contract  that  the  sinking 
funds  shall  be  maintained  and  no  administration  could, 
however  radical  its  wishes,  change  the  nature  of  that  con- 
tract, nor  fail  to  provide  resources  for  the  sinking  funds. 

Perhaps  some  of  you  are  afraid  of  the  socialistic  ten- 
dencies of  the  day.  Personally,  I  think  there  is  much 
less  to  fear  from  any  prospective  radical  political  devel- 
opment than  some  timid  financiers  imagine.  I  am  op- 
timistic about  integrity.  Most  people  are  honest  and 
most  parties  are  honest.  There  is  no  radical  political 
condition  that  I  can  imagine  that  will  fundamentally 


370  HISTORY  OF  THE  SAVINGS  BANKS 

affect  the  security  of  a  New  York  City  bond.  A  social- 
istic victory  might  sentimentally  affect  it,  although  I  do 
not  believe  that  any  socialistic  party  which  will  be  evolved 
in  New  York  will  really  aim  to  do  that.  But  taking  the 
most  pessimistic  view  of  the  political  outlook,  supposing 
that  men  should  be  elected  to  administer  the  city's  affairs 
whose  aims  were  calculated  to  destroy  the  city's  credit, 
they  would  find  that  credit  entrenched  behind  a  bulwark 
of  constitutional  limitations  and  charter  rights  which 
would  prove  effective  safeguards  for  protecting  the  inter- 
ests of  every  investor  in  a  New  York  City  obligation. 

Coming  now  to  the  ability  of  New  York  to  support 
without  undue  burden  the  present  or  probable  financial 
debt,  I  believe  it  needs  but  the  most  casual  knowledge  of 
the  city  to  leave  no  doubt  on  that  score.  The  growth  of 
this  city  is  among  the  certainties  of  the  future.  The 
United  States  Government  Actuary  tells  me  that  I  may 
quote  his  unqualified  opinion  that  Greater  New  York 
will  have,  when  the  recent  issue  of  four  per  cent,  bonds 
mature,  a  population  of  8,500,00c,  and,  judging  by  recent 
records,  wealth  will  grow  far  faster  than  the  population. 
Is  there  much  doubt  that  such  a  city  can  discharge  its 
obligations? 

I  believe  one  of  the  great  mistakes  of  city  financiering 
has  been  the  issue  of  long-term  bonds  during  this  period 
of  depressed  municipal  credit.  Not  many  years  ago  the 
city  sold  two  and  one  half  per  cent,  bonds  at  par.  I  will 
make  a  prediction.  Before  ten  years  more  have  passed, 
and  in  the  event  of  the  realization  of  certain  contingencies 
toward  which  conditions  seem  now  inevitably  working, 
the  recently  issued  fifty-year  four  per  cent,  bonds  of  the 
City  of  New  York  will  sell  at  125.  The  contingencies  by 
which  I  Umit  this  prediction  are  these:  There  will,  I 
believe,  be  a  rapidly  widening  market  for  New  York's 
securities.  Strong  boxes  of  this  city  will  not  in  the  future 
contain  all  of  these  obligations.  With  a  wider  under- 
standing of  their  strength  and  an  appreciation  of  their 
attractive  return,  I  see  no  reason  why  we  should  not 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    371 

come  to  have  an  international  market  for  them.  With  a 
broadening  market  will  come  a  marked  appreciation  in 
price,  but  the  time  will  eventually  come  when  the  city 
will  cease  floating  new  issues  with  the  rapidity  which  has 
been  recently  characteristic.  There  will  be  quick  market 
response  to  an  escape  from  the  pressure  of  new  bonds,  but 
the  suspension  of  new  issues  will  be  followed  by  another 
influence  which  is  certain  to  have  a  most  buoyant  effect 
on  prices.  If  new  issues  should  cease  either  as  a  result 
of  reaching  the  constitutional  debt  limit  or  from  other 
reasons,  the  demands  for  the  sinking  funds  must  then  be 
met  in  the  open  market.  Under  these  conditions,  with 
even  a  part  of  the  income  of  the  sinking  funds  used  in  the 
purchase  of  bonds  in  the  open  market,  I  believe  we  would 
have  a  situation  that  would  parallel  the  market  position 
of  British  consols  when  those  low-rate  securities  sold  at 
113  just  prior  to  the  Boer  War.  If  these  various  con- 
tingencies eventuate,  the  figure  of  125  which  I  have 
named  as  a  market  measure  of  the  four  per  cent,  bonds 
will  be  well  within  the  actual  facts. 

Under  such  conditions  the  city  ought  now  to  be  issuing 
short-time  obligations  and  not  burdening  future  gener- 
ations which  wiU  more  clearly  understand  the  true  strength 
of  her  credit  with  long-term  high-rate  bonds.  There  is, 
I  believe,  one  important  reason  why  there  has  been 
a  failure  to  comprehend  the  true  merit  of  New  York 
City's  obligations.  That  reason  is  to  be  found  in  the 
method  of  municipal  bookkeeping.  Improvements  were 
made  in  restating  the  annual  report  under  the  adminis- 
tration of  Comptroller  Grout.  There  is  to-day  the  grav- 
est demand  for  improvements  in  bookkeeping  methods 
of  the  Comptroller's  office.  Fortunately  that  situation 
is  clearly  seen  by  the  present  Comptroller.  It  is  a  fact 
that  to-day  there  is  no  true  balance  sheet  of  the  City  of 
New  York.  Its  so-called  balance  sheet  contains  mean- 
ingless credits  that  have  been  improperly  carried  year  by 
year  since  their  disgraceful  birth  in  the  corruption  of  the 
Tweed  Ring.     In  none  of  the  reports  of  the  Comptroller 


372  HISTORY  OF  THE  SAVINGS  BANKS 

is  it  possible  to  obtain  in  succinct  form  an  intelligent  view 
of  the  city's  true  financial  position.  Here  is  this  great 
metropolis,  with  its  income  well  exceeding  $100,000,000 
annually,  undertaking  vast  public  works,  issuing  millions 
upon  millions  of  obligations,  and  presenting  a  system  of 
municipal  accounts  that  have,  even  with  the  improve- 
ments already  inaugurated,  been  brought  to  a  point  that 
is  not  much  short  of  chaotic. 

One  of  the  greatest  opportunities  to  do  a  public  service 
existing  anywhere  to-day  lies  in  the  position  of  the  Comp- 
troller of  the  City  of  New  York.  The  demands  of  that 
position  fall  but  little  short  in  realimportanceof  those  of  the 
position  of  chief  finance  minister  of  the  nation.  In  the  finan- 
cial world  the  position  should  be  regarded  as  a  close  second 
in  dignity  and  recognized  responsibility  to  the  Treasury 
portfolio  itself.  There  is  the  opportunity  for  the  genius 
of  a  Hamilton  in  reforming  the  accounting  methods  and 
presenting  to  the  public  a  true  report  of  the  business  of 
this  city.  It  is  a  fortunate  thing  that  the  position  of 
Comptroller  carries  with  it  a  centralized  power  that  makes 
it  possible  quickly  to  obtain  effective  results.  It  is  for- 
tunate, too,  and  some  of  you  may  be  surprised  at  this 
statement,  that  there  are  among  the  old  employees  of  the 
Comptroller's  office  a  number  of  men  who  for  ability, 
loyalty,  and  devotion  to  their  work,  and  for  unselfishness 
of  motives,  may  well  challenge  comparison  with  the  staff 
of  any  financial  institution  in  this  city.  Above  all,  it  is 
extremely  fortunate  that  the  position  of  Comptroller  is 
to-day  filled  by  a  man  who  recognizes  with  remarkable 
clearness  the  exact  situation  surrounding  the  city's  credit 
and  who  has  the  force  and  energy  that  gives  every  promise 
that  greater  improvement  will  be  wrought. 

I  am,  then,  optimistic  about  New  York  City's  credit. 
There  is  the  foundation  here  to  support  with  ease  and 
certain  security  the  structure  that  has  been  raised.  There 
are  safeguards  in  constitution  and  charter  which  absolutely 
remove  the  city's  credit  from  any  danger  of  passing  politi- 
cal whim.     The  system  of  centralized  responsibility  which 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    373 

the  charter  provides  has  completely  removed  the  city's 
credit  from  the  possible  danger  of  attack  by  a  corrupt 
and  irresponsible  ring.  There  have  been  provided  sinking 
funds  ample  to  insure  the  steady  redemption  of  outstand- 
ing obligations.  The  earlier  sinking  funds  are  unscien- 
tific, but  the  mistakes  have  been  on  the  side  of  supplying 
too  much  rather  than  too  little  revenue  for  their  purposes. 
We  need  only  a  better  understanding  of  the  true  strength 
of  New  York  City's  obligations.  When  we  have  that  the 
market  quotation  of  a  New  York  City  bond  will  be  one  of 
the  city's  worthiest  monuments. 

REFORM  IN  CURRENCY  AND  BANKING  WITH  REFERENCE  TO 

CRISES 

The  following  address  was  given  by  Professor  Taussig, 
of  Harvard  University: 

We  have  heard  much  of  late  of  the  desirability  of  an 
elastic  currency  as  a  means  of  preventing  disturbances  in 
the  money  market,  and  of  alleviating,  if  not  preventing, 
commercial  crises.  I  propose  to  say  something  as  to  the 
relation  between  elastic  issues  and  the  prevention  of 
crises,  and  to  say  something  also  as  to  the  general  condi- 
tions of  banking  by  which  crises  can  be  prevented  or  made 
less  acute. 

The  proposals  now  current  for  elastic  note  issues  rest 
largely  on  the  experiences  of  our  last  great  crisis,  that  of 
1893.  Then,  it  will  be  remembered,  there  was  an  extraor- 
dinary demand  for  cash.  That  demand  was  so  intense 
and  so  indiscriminating  that  people  were  eager  to  secure 
the  very  greenbacks  and  silver  certificates  whose  possible 
depreciation  under  a  silver  standard  was  the  prime  cause 
of  the  panic.  All  sorts  of  curious  devices  for  eking  out 
scarcity  of  currency  were  then  resorted  to,  and  the  cir- 
cumstances seemed  to  indicate  clearly  the  need  of  some 
means  of  providing  an  additional  supply  of  cash  in  times 
of  panic.     Similar  phenomena  have  shown  themselves  at 


374  HISTORY  OF  THE  SAVINGS  BANKS 

other  times  and  in  other  countries  than  our  own,  very 
strikingly  during  the  panic  of  1873  in  this  country,  and 
that  of  1857  in  England. 

Before  proceeding  to  consider  what  may  be  the  needs 
and  remedies  in  times  of  a  general  financial  crisis,  let  me 
say  a  word  as  to  another  emergency  for  which  an  elastic 
currency  is  sometimes  desired.  This  is  the  not  infrequent 
high  rate  of  interest  for  demand  loans,  showing  itself 
conspicuously  in  the  rate  for  call  money  on  the  Stock 
Exchange.  So  far  as  this  sort  of  situation  is  concerned, 
I  may  confess  at  once  to  a  doubt  whether  legislation  or 
any  sort  of  curative  measure  is  called  for.  If  the  specula- 
tive fraternity  alone  is  affected,  matters  may  be  allowed 
to  take  their  course  without  further  concern  by  the  public. 
And,  as  a  rule,  I  take  it,  it  is  the  speculative  fraternity 
which  alone  is  affected.  Even  when  call  money  rules 
high,  time  money  and  loans  to  the  general  business  public 
are  usually  little  disturbed.  So  far  as  Stock  Exchange 
dealers  and  speculators  are  concerned,  the  pressure  of 
high  rates  for  loans  is  a  useful  brake.  Recurrent  high 
rates  seem  to  be  necessary,  in  order  to  prevent  gambling 
from  being  carried  to  the  extreme  of  unbridled  speculation. 

The  really  serious  situation  arises  when  merchants  and 
the  business  community  generally  feel  the  effects  of  the 
pressure.  Even  in  this  case  a  rising  rate  of  interest  and  a 
difficulty  in  procuring  all  the  advances  wanted  are  not 
necessarily  bad  signs.  The  business  community  gener- 
ally, not  less  than  the  Stock  Exchange,  may  be  affected 
by  the  virus  of  speculation,  and  the  demand  for  means 
to  make  purchases  and  maintain  feverish  activity  may  be 
checked  in  a  healthful  way  by  a  rising  charge  for  loans. 
A  general  high  rate  of  interest  under  these  conditions  is, 
on  the  one  hand,  a  result  of  activity  in  business,  and,  on 
the  other  hand,  a  useful  check  to  its  undue  extension. 

When,  however,  conditions  of  panic  set  in  for  the  busi- 
ness community  at  large  the  case  is  dijfferento  WTien 
ready  means,  immediate  command  of  cash,  are  wanted 
because  there  is  general  uneasiness  on  account  of  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    375 

general  conditions  of  credit;  when  not  only  brokers  and 
speculators,  but  merchants  and  manufacturers  and  dealers, 
are  anxious  as  to  the  future;  when  there  is  danger  of  col- 
lapse and  indiscriminate  ruin;  then  the  situation  calls  for 
a  remedy.  What  remedy  shall  be  applied?  And  what 
is  to  be  said  as  to  an  elastic  currency? 

Here  I  would  distinguish  between  two  kinds  of  demand 
which  appear  in  time  of  crises:  on  the  one  hand,  a  demand 
for  cash, and,  on  the  other  hand,  a  demand  for  accommoda- 
tion. These  are  not  the  same.  They  rest  on  different 
causes  and  call  for  different  remedies.  I  may  say  at  once, 
by  way  of  indicating  my  general  conclusions,  that  the  de- 
mand for  accommodation  seems  to  be  the  more  important, 
and  that,  given  the  means  for  meeting  this,  measures  for 
elasticity  in  the  currency  can  be  really  dispensed  with. 

Consider  for  a  moment  what  is  the  nature  of  the  demand 
for  cash  in  times  of  crisis.  It  is  strictly  an  abnormal  and 
artificial  demand.  It  rests  upon  no  need  of  money  for 
actual  use.  There  are  no  more  payments  to  be  made  than 
usual.  The  cash  which  individuals  call  for  under  those 
circumstances  is  in  reality  a  nuisance  to  them,  not  con- 
venience. It  must  be  locked  away  and  stored  and  looked 
after.  The  call  for  it  is  simply  the  result  of  a  general 
shock  of  confidence,  and  especially  of  a  loss  of  confidence 
in  banking  institutions.  If  every  one  were  assured  that 
he  could  get  his  cash  from  the  bank  whenever  he  wanted 
it,  he  would  much  prefer  to  leave  it  on  deposit  rather  than 
to  withdraw  it.  The  universal  experience  is  that  when 
once  the  acute  stage  of  a  crisis  is  over,  the  cash  which 
has  been  so  insistently  called  for  reappears  in  the  usual 
depositories  and  shortly  becomes  as  redundant  as  before 
it  was  scarce. 

If  indeed  this  stage  of  collapse  of  confidence  has  once 
been  reached,  it  is  possible  that  some  device  for  an  emer- 
gency money  issue  may  be  helpful.  Virtually,  this  is  what 
the  Bank  of  England  does  when  the  bank  act  is  suspended. 
The  suspension  of  the  act  puts  at  the  disposal  of  the  bank 
an  unlimited  amount  of  virtually  legal  tender  cash.  Even 


376  HISTORY  OF  THE  SAVINGS  BANKS 

then  it  is  not  the  actual  issue  of  such  cash,  but  the  cer- 
tainty that  it  can  be  had  when  wanted  which  allays  the 
feelings  of  panic.  I  am  by  no  means  sure  that  any  legis- 
lative device  which  we  could  adopt  in  the  United  States 
would  have  the  same  effect.  The  proposals  commonly 
put  forth  look  to  a  comparatively  small  extension  of  the 
bank-note  circulation,  which  is  already  small.  If  there 
arises  a  general  alarm  among  the  depositors  and  customers 
of  banks,  I  am  by  no  means  sure  that  a  privilege  of  addi- 
tional note  issue  will  prove  an  effective  remedy. 

But  in  any  case  such  a  remedy  can  be  only  in  the  nature 
of  a  palliative.  It  rnay  in  some  degree  counteract  the 
results  of  alarm  in  panic.  But  it  cannot  act  as  a  pre- 
ventive. Indeed,  the  regular  and  repeated  exercise  of 
a  power  of  additional  issue,  during  the  cycle  of  activity 
and  speculation  which  precedes  the  commercial  panic, 
will  foment  rather  than  allay  the  causes  of  disturbances. 
Other  means  of  prevention  must  be  looked  to,  and  these 
means  of  prevention  can  be  found  by  satisfying  that 
demand  for  accommodation  to  which  I  referred,  and  of 
which  something  more  may  now  be  said.  The  demand 
for  accommodation  seems  to  me  to  indicate  the  real  and 
fundamental  need.  It  is  the  desire  to  be  taken  care  of;  to 
have  assurances  for  the  present  and  for  the  immediate 
future.  In  all  times  of  uncertainty,  most  of  all  in  times 
of  acute  crises,  merchants  and  business  men  need  to  be 
safeguarded  against  accidental  or  unjustified  insolvency. 
Their  debts  are  recurrently  coming  due,  their  credits,  on  the 
other  hand — the  debts  due  to  them — are  more  or  less 
uncertain.  A  concern  whose  affairs  are  in  good  condition 
may  be  unable  to  meet  its  immediate  liabilities  simply 
because  its  quick  assets  are  for  the  moment  not  available. 
If  there  be  certaint}^  that  the  banks  are  willing  and  able 
to  make  advances  to  firms  in  this  situation,  their  real 
demands  are  met.  Such  certainty  is  the  one  effective 
agency  in  preventing  universal  panic.  It  cannot  be  too 
much  insisted  on  that  it  is  the  accommodation,  not  cash, 
which  is  then  wanted  from  the  banks. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    377 

Now  accommodation  can  be  granted  by  the  banks  only 
if  they  are  secure  in  their  own  position.  They  must  not 
themselves  be  involved  in  risky  enterprises.  Least  of  all 
should  they  be  heavily  committed  toward  any  one  venture 
of  an  uncertain  character.  They  must  have  confidence 
in  themselves,  and  they  must  have  the  confidence  of  the 
business  community.  They  must  be  in  a  position  in 
which  they  do  not  need  to  look  out  for  themselves,  and 
in  which  they  are  able  to  look  out  for  their  customers. 
And  they  must  not  only  be  able  thus  to  serve  their  cus- 
tomers, but  they  must  have  earned  the  respect  and  con- 
fidence of  the  business  community  in  such  degree  that 
every  one  believes  them  able  to  do  so. 

This  general  feeling  of  confidence  can  rest  only  upon 
continued  careful  and  conservative  management  in  the 
past.  It  cannot  be  secured  if  banks  are  known  to  be  in- 
volved in  large  new  ventures,  if  they  are  closely  related 
with  financial  and  investment  concerns  which  are  pro- 
moting risky  enterprises,  or  if  individuals  who  are  domi- 
nant in  their  management  are  known  to  have  other  and 
more  pressing  interests  than  those  of  the  bank  proper. 
Ideally,  the  commercial  bank  is  in  a  judicial  position, 
standing  aloof  from  other  business  than  that  of  banking 
proper.  It  lends  only  on  sound  security,  or  to  individ- 
uals whose  affairs  are  satisfactorily  known  in  their  full 
extent.  It  distributes  its  loans  over  a  large  part  of  the 
business  community.  Never  puts  too  many  eggs  in  one 
basket,  and  marshals  its  advances  so  that  they  shall  become 
due  in  proper  succession.  It  keeps  a  strong  reserve  of  cash. 
It  is  free  at  any  time  to  make  additional  loans,  and  is  able 
to  respond  to  all  reasonable  requests  for  accommodation 
from  sound  borrowers.  Such  is  the  kind  of  management 
contemplated  in  our  national  banking  system,  and  pro- 
vided for  by  the  details  of  its  legislation. 

Now  in  this  regard  the  banking  situation  in  the  United 
States  seems  to  have  changed,  and  changed  for  the  worse  in 
the  last  ten  or  twenty  years.  The  old  ideal  of  a  strictly 
commercial  bank,   having  its  semi- judicial  policy   and 


378  HISTORY  OF  THE  SAVINGS  BANKS 

consequent  prestige,  seems  to  be  passing  away.  The 
tendency  is  for  a  combination  of  various  kinds  of  banking 
operations  in  one  hand  or  in  one  set  of  hands. 

National  banks  and  State  banks  doing  a  similar  busi- 
ness are  closely  associated  with  investment  houses,  with 
the  large  private  banking  firms  that  undertake  to  promote 
and  finance  great  ventures  in  new  business  fields,  with  trust 
companies  that  carry  on  a  very  wide  range  of  financial 
operations,  and  with  individuals  whose  primary  interest 
is  not  in  banking  but  in  independent  enterprises  of  their 
ow^n.  The  great  development  of  the  trust  companies 
in  the  last  two  decades  seems  to  be  the  most  important 
cause  of  this  change  in  the  general  situation.  On  the 
one  hand,  they  are  competitors  of  the  banks  in  a  business 
which  was  formerly  that  of  banks  alone;  on  the  other  hand, 
the  example  which  they  have  set  of  earning  large  profits 
by  a  combination  of  various  financial  operations  has 
tempted  the  banks  to  follow  in  the  sam.e  path. 

Not  so  very  long  ago  something  like  a  division  of  labor 
was  traditional  as  to  the  various  sorts  of  banking  oper- 
ations. Thus  there  were  commercial  banks  proper,  of 
which  our  national  banks  are  one  type,  and  the  joint  stock 
banks  of  Great  Britain  are  another;  there  was  the  financing 
and  investment  concerns,  which  promoted  new  enterprises, 
floated  their  securities,  and  had  their  assets  committed 
to  great  manufacturing  or  mining  or  trading  ventures; 
there  were  the  private  banks  and  trust  companies,  which 
acted  as  agents  for  persons  of  means,  and  did  a  semi-legal 
trust  business;  there  were  the  foreign  exchange  houses 
and  those  who  made  commercial  advances  in  connection 
with  foreign  trade;  finally  there  were  the  pure  Savings 
Banks,  not  doing  anything  except  to  invest  the  accumu- 
lations of  a  multitude  of  persons  of  small  means. 

There  has  been  a  growing  tendency  during  the  genera- 
tion just  past  to  combine  all,  or  almost  all  of  these  opera- 
tions in  one  great  banking  institution,  similar  to  the 
tendency  which  has  shown  itself  toward  the  combination 
in  one  great  concern  of  various  kinds  of  manufacturing  or 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    379 

mercantile  activity.  It  has  shown  itself  as  markedly  on 
the  continent  of  Europe  as  in  the  United  States.  More 
particularly  the  great  German  banks  show  a  striking 
combination  of  diverse  operations  conducted  on  a  very 
large  scale  by  a  few  powerful  banks.  In  the  United  States 
the  large  trust  companies  of  the  seaboard  and  the  centre 
of  the  country  illustrate  the  same  sort  of  development. 

Such  widespread  operations  bring  the  chance  of  great 
gains.  They  mean  economy  in  the  direct  expenses  of 
management.  They  enable  one  part  of  the  concern's  opera- 
tions to  interlock  with  the  other  parts,  and  make  it  pos- 
sible, and  apparently  easy,  to  earn  two  or  three  profits 
instead  of  one.  But  they  mean  also  greater  risks  and 
greater  commitments.  There  is  a  chance  of  making  more 
money,  but  there  is  also  a  certainty  of  a  greater  locking  up 
of  capital.  There  is  less  easy  command  of  free  resources, 
greater  danger  of  embarrassment  if  the  unexpected  hap- 
pens. The  process  tends  to  mean  less  cash  on  hand,  less 
reserve,  less  ability  to  meet  sudden  demands.  Even 
when  it  is  not  directly  engaged  in  a  wide  range  of  opera- 
tions, it  is  often  so  closely  associated  with  the  trust  com- 
pany or  banking  firm  undertaking  them  that  to  all  intents 
and  purposes  its  resources  are  locked  up  in  the  same  way. 

These  tendencies  seem  to  me  to  bring  peculiar  dangers 
in  the  United  States.  In  Europe  its  dangers  are  in  large 
degrees  counteracted  by  the  position  of  the  great  state 
banks,  such  as  the  Bank  of  England,  the  Bank  of  France, 
and  the  Imperial  Bank  of  Germany.  These  have  pre- 
cisely the  judicial  position,  the  aloofness  from  current 
business  operations,  which  I  have  described  as  the  ideal 
for  a  commercial  bank.  They  stand  above  the  general 
banking  and  commercial  community.  They  have  un- 
limited prestige ;  they  cannot  fail  unless  the  whole  political 
and  business  structure  collapses.  They  can  always  be 
counted  upon  to  stand  in  the  breach  if  general  ruin 
threatens.  And  not  only  this,  but  they  have  a  conscious 
duty  tov/ard  the  public.  They  may  not  extend  their 
operations   to  the  point  of  maximum  profit.     Whether 


38o  HISTORY  OF  THE  SAVINGS  BANKS 

by  force  of  established  tradition,  as  in  the  case  of  the 
Bank  of  England,  or  by  direct  public  control  of  the 
management,  as  in  the  continental  countries,  they  re- 
strain their  operations  in  such  a  manner  as  to  keep 
themselves  in  a  position  of  absolute  safety  and  power. 
Such  a  firm  basis  for  the  financial  structure  we  lack  in 
the  United  States.  The  Associated  Banks  of  New  York 
in  some  respects  occupy  an  analogous  position,  yet  ob- 
viously with  much  less  sense  of  responsibility  and  with 
much  less  probability  of  conservative  management  by  the 
individual  institutions. 

I  do  not  look  forward  with  anxiet}'  so  much  to  the  con- 
solidation of  banking  institutions,  or  to  the  increase  in  the 
size  and  scope  of  individual  banks,  as  I  do  to  the  combina- 
tion of  various  sorts  of  operations  in  one  concern,  and 
the  close  affiliation  of  banks  with  particular  enterprises 
or  particular  financing  and  promoting  concerns.  It  is 
this  tendency  to  varied  operations  on  a  great  scale  which 
threatens  the  stability  of  the  banking  community  and  its 
possibility  of  helpfulness  to  the  business  community  in 
times  of  panic.  Great  capital  and  large  resources  in  a 
bank  increase  its  power  to  grant  accommodations  and  its 
ability  to  support  and  encourage  business  concerns  in 
time  of  crisis.  But  the  combination  of  a  wide  range  of 
operations,  many  of  them  involving  serious  risks,  means 
that  the  bank  itself  may  need  accommodation.  It  may 
have  to  ask  for  forbearance,  instead  of  freely  offering  aid. 

The  measures  for  reform  which  I  should  advocate  are, 
therefore,  primarily  measures  which  look  to  accommoda- 
tion; to  prudent  management  and  free  resources,  rather 
than  to  increasing  the  supply  of  cash  in  times  of  crisis. 
The  means  toward  this  end  are  partly  legislation,  but 
perhaps  in  even  a  greater  degree  improvements  in  the 
traditions  and  customs  of  the  banking  community. 

I .  So  far  as  legislation  is  concerned,  more  stringent  regu- 
lation of  the  business  of  trust  companies  and  other  bank- 
ing institutions  under  State  charters  is  called  for.  The 
State  banks  and  trust  companies  should  be  called  on  to 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    381 

keep  larger  cash  reserves,  should  make  more  frequent  and 
explicit  reports  of  their  condition,  and  should  be  subjected 
to  more  careful  and  rigid  examination.  Especially  in  the 
State  of  New  York,  and  with  reference  to  the  conditions 
of  the  metropolis,  there  is  need  of  more  stringent  legisla- 
tion in  regard  to  the  State  banks  and  trust  companies. 
So  long  as  they  are  allowed  to  carry  on  their  operations 
with  the  very  smallest  supplies  of  cash  it  is  possible  to  get 
on  with,  and  to  keep  almost  the  whole  of  their  reserves  in 
the  coffers  of  the  national  banks,  the  virtual  liabilities  of 
the  banks  are  vastly  inflated,  and  at  the  same  time  the 
combination  of  trust  companies  and  banks  into  one  chain 
of  united  interests  is  almost  inevitable. 

2.  The  national  banks  themselves  should  be  given 
greater  opportunities  for  profit.  Any  peculiar  profit  to 
them  can  arise  only  out  of  note  issue.  In  other  respects 
they  have  no  advantage  over  State  concerns,  and  are  at  a 
disadvantage  from  the  heavier  requirements  of  the  Na- 
tional Banking  Act.  It  has  been  abundantly  proved  in 
the  discussions  of  recent  years  that  a  more  liberal  scheme 
of  note  issues  can  be  arranged,  especially  for  banks  of 
sufficiently  large  capital,  with  abundant  security  for  the 
notes,  and  yet  with  sufficient  profit  to  make  a  national 
charter  of  substantial  advantage. 

3.  It  may  be  Utopian  to  expect  a  sense  of  duty  to  be 
maintained  or  strengthened  in  the  face  of  opportunities 
for  great  profit.  Yet  I  hope  that  more  vivid  realization 
of  the  public  importance  of  their  operations  may  affect 
the  policy  of  those  in  charge  of  our  great  banking  insti- 
tutions. Can  we  not  nurture  something  like  a  sense  of 
professional  ethics  among  the  bankers,  analogous  to  that 
which  the  physicians  and  the  lawyers  maintain  for  their 
professions?  May  it  not  be  understood  that  a  bank's 
operations  have  an  important  part  in  promoting  the  sober 
conduct  of  industry  and  discouraging  rash  enterprises? 
And  may  it  not  be  recognized  that  it  is  part  of  the  banker's 
duty  to  keep  his  affairs  in  such  condition  that  he  can  grant 
accommodation  and  support  in  times  of  peril? 


382  HISTORY  OF  THE  SAVINGS  BANKS 

4.  The  development  of  such  a  spirit  among  the  banks 
depends  in  no  small  degree  upon  whether  the  community 
appreciates  it.  There  will  always  be  differences  in  spirit 
and  temper  among  the  banking  institutions.  Some  will 
be  conservative,  some  will  be  rash.  Some  will  be  known 
to  keep  their  affairs  within  the  limits  of  safety;  some  will 
be  known  to  launch  boldly  on  dangerous  operations.  The 
more  the  business  community  keeps  its  accounts  with 
strong  and  prudent  concerns,  and  the  more  it  resists  the 
blandishments  and  the  seductive  offers  of  the  more  specu- 
lative institutions,  the  sounder  will  be  the  general  situation. 
Such  institutions  as  Savings  Banks  seem  to  me  have  a 
peculiar  duty  to  do  what  is  in  their  power  to  encourage 
careful  and  farsighted  banking. 

5.  I  have  referred  to  the  dangers  which  arise  from  the 
combination  in  one  institution  of  a  great  variety  of  opera- 
tions. It  is  not  an  easy  matter  to  check  this  tendency 
directly  by  legislation;  for  restrictions  are  not  easy  to 
frame,  and  still  less  easy  to  enforce  after  being  framed. 
In  one  direction,  however,  a  separation  of  the  different 
sorts  of  operations  can  be  brought  about  with  comparative 
ease,  and  can  be  enforced  by  legislation.  This  is  with 
regard  to  savings  deposits.  The  addition  of  a  savings 
department  to  the  operations  of  a  bank  or  trust  company 
which  carries  on  a  great  variety  of  financial  operations 
brings  some  peculiar  dangers.  On  the  one  hand,  a  great 
mass  of  funds  is  offered  for  permanent  investment,  and 
the  temptation  is  strong  to  place  them  in  enterprises  con- 
nected with  the  other  operations  of  the  bank.  They  are 
thus  locked  up  in  new  and  more  or  less  uncertain  ventures, 
and  are  made  the  means  of  promoting  enterprises  involving 
much  greater  risk  than  the  small  investor  means  to  take, 
or  ought  to  take.  On  the  other  hand,  depositors  of  this 
class  are  specially  liable  to  panic,  and  may  bring  uncon- 
trollable pressure  in  periods  of  stress.  The  privilege  of 
delay  in  paying  them  under  such  circumstances,  though  it 
may  serve  to  bolster  up  the  individual  institution,  yet  it 
tends  to  intensify  a  general  collapse  of  confidence ;  since  it 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    383 

is  supp>osed,  rightly  or  wrongly,  to  be  an  indication  of 
weakness  to  use  the  option  of  delay.  The  laws  of  some  of 
our  Eastern  States,  notably  Massachusetts  and  New  York, 
provide  for  the  conduct  of  Savings  Banks  as  virtually  co- 
operative establishments,  divorced  completely  from  other 
banking  operations.  Some  of  the  great  states  of  the 
Central  region  which  have  not  yet  adopted  this  wise  policy 
are  thereby  encouraging  methods  of  banking  and  invest- 
ment which  bring  undue  hazards  for  the  savings  depositors 
and  may  bring  disastrous  consequences  in  times  of  panic. 

I  need  hardly  say  that  in  these  brief  remarks  I  have 
considered  only  a  few  restricted  phases  of  banking  practice 
and  currency  reform.  So  far  as  elasticity  in  the  currency 
is  concerned,  I  have  said  nothing  on  that  phase  of  the 
problem  which  relates  to  the  needs  of  the  agricultural  dis- 
tricts, or  to  the  peculiar  effects  which  ensue  under  our  pres- 
ent system  from  the  price  and  yields  of  U.  S.  bonds.  The 
strongest  ground  on  which  an  elastic  currency,  responsive 
to  the  varying  conditions  of  business,  can  be  urged,  rests 
on  the  seasonal  demands  of  the  agricultural  regions.  But 
this  large  and  interesting  topic  lies  outside  my  present 
subject.  I  have  had  in  mind  one  phase  only  of  the  de- 
mand for  elasticity,  that  which  looks  to  the  prevention  or 
mitigation  of  crises. 

To  sum  up  what  I  have  said,  my  belief  is  that  we  cannot 
look  with  much  hope  to  any  legislation  toward  elastic  money 
issues  as  a  panacea  against  panics.  At  best,  freedom  of 
note  issue  during  a  panic  is  only  a  palliative  and  a  palliative 
of  uncertain  effect.  There  is  no  certain  panacea.  Ups  and 
downs  of  industry  are  inseparable  from  the  modern  indus- 
trial system,  and  periods  of  active  prosperity  seem  certain 
to  be  followed  by  periods  of  crisis  and  depression.  The 
chief  means  by  which  banks  can  mitigate  the  effects  of  these 
fluctuations  is  by  prudent  and  careful  management,  by  the 
maintenance  of  a  strong  and  unhampered  position  for  them- 
selves, by  the  fostering  of  right  traditions  as  to  the  functions 
and  duties  of  bankers,  and  by  a  policy  of  liberal  support  and 
free  accommodation  in  times  of  incipient  panic. 


CHAPTER  XIV 

Fourteenth  Annual  Convention — Sorrow  over  the  Death  of  Former 
President  John  Harsen  Rhoades — Memorial  of  Respect  to  His 
Memory — Paper  on  Bond  Investments  of  Savings  Banks  by- 
Mr.  Mills — Address  on  "Mortgages"  by  Charles  L.  Stone,  of 
Syracuse — Address  of  Supt.  Charles  A.  Keep,  of  the  Banking 
Department — "Amortization,"  Explained  by  Mr.  Sprague — 
Bank  Advertising  and  Its  Proper  Uses. 

THE  Association  convened  in  its  accustomed  place 
in  the  City  of  New  York,  on  May  17,  1907,  under 
circumstances  of  peculiar  sadness,  having  lost  in 
the  interim  since  the  last  convention  its  most  highly  es- 
teemed former  President,  and  the  real  founder  of  the 
Association — John  Harsen  Rhoades. 

ADDRESS  OF  PRESIDENT  VAN  RENSSELAER 

In  his  opening  address.  President  Van  Rensselaer  feel- 
ingly referred  to  the  death  of  Mr.  Rhoades  as  follows: 

Another  year  has  passed  since  I  had  the  honor  of  wel- 
coming you  here  in  this  beautiful  room.  As  we  take  our 
places  to-day  there  must  be  a  general  recognition  of  the 
absence  of  the  founder  of  this  Association,  Mr.  John  Harsen 
Rhoades,  and  I  know  you  aU  feel  a  sense  of  sorrow  at  the 
thought  that  he  will  be  with  us  no  more.  We  owe  him  a 
debt  of  gratitude  for  bringing  us  together  for  mutual  pro- 
tection and  for  the  advancement  of  aU  interests  that  are 
beneficial  to  Savings  Banks  and  to  their  depositors. 

This  Savings  Banks  Association  has  taken  a  prominent 
position  among  the  eleemosynary  institutions  of  this  State 

384 


HISTORY  OF  THE  SAVINGS  BANKS  ASSOCIATION  385 

and  it  has  proved  itself  of  great  benefit  to  its  individual 
members. 

It  gives  me  the  greatest  satisfaction  in  coming  to  this 
meeting  to-day  to  be  able  to  feel  that  the  last  year  has  been 
one  of  quiet  but  nevertheless  continued  prosperity  and 
advancement  of  our  mutual  interests.  "Happy  is  the 
countr>'  without  a  history"  may  truly  for  us  be  para- 
phrased and  let  us  say :  "Happy  is  the  year  that  is  free  from 
controversy,  panic,  or  financial  calamity."  To  go  a  little 
into  detail  during  the  year  1906  the  open  accounts  on  the 
books  of  the  135  Savings  Banksof  this  State  were  2,685,809, 
showing  an  increase  of  116,030  accounts. 

The  depreciation  in  the  market  value  of  all  first-class 
and  conservative  investments  has  been  considerable,  but 
as  Savings  Banks  generally  expect  to  hold  their  invest- 
ments until  maturity,  the  fluctuation  in  the  market  is  of 
small  concern.  As  a  matter  of  fact,  this  very  depreciation 
enables  us  now  to  invest  at  prices  that  produce  so  much 
more  income,  that  more  than  half  of  the  banks  in  this 
Association  on  the  first  of  January  paid  their  depositors 
interest  at  the  rate  of  four  per  cent.,  and  probably  several 
more  will  be  able  to  increase  their  rate  to  four  per  cent,  on 
the  next  interest  day  should  their  trustees  consider  it  a  wise 
policy  to  do  so. 

This  demonstrates  the  importance  of  keeping  our  eyes 
fixed  on  the  amortized  value  of  our  securities  and  not  to  be 
worried  about  their  market  value. 

The  question  has  again  been  raised  in  regard  to  com- 
puting the  twenty-five  per  centum  of  the  assets  of  the 
bank  which  may  be  loaned  or  invested  in  railroad  bonds. 
Mr.  Kilburn,  the  former  Superintendent  of  Banks,  ruled 
that  the  twenty-five  per  centum  must  be  computed  on  the 
basis  of  the  cost  of  the  bonds  at  the  time  of  purchase ;  but 
the  present  Superintendent,  Mr.  Keep,  has  reversed  that 
ruling,  and  in  a  letter  to  me  he  says:  "  I  think  it  tolerably 
clear  that  either  market  value  should  be  the  basis  of  com- 
putations under  the  last  paragraph  of  Section  116  or,  at 
any  rate,  that  the  principle  of  amortization  should  be  taken 


386  HISTORY  OF  THE  SAVINGS  BANKS 

into  account,  and  the  original  investment  of  the  bank  in 
the  bonds  of  a  particular  company  should  be  considered 
as  reduced  year  by  year  by  the  amount  necessary  to  absorb 
the  premium  paid  during  the  life  of  the  bond.  The  matter 
is  one  that  might  well  have  the  consideration  of  the  Sav- 
ings Banks  Association  with  a  view  to  reaching  a  definite 
understanding." 

The  Executive  Committee  has  not  had  a  meeting  at 
which  I  could  submit  this  letter,  but  I  hope  that  the  new 
Committee  to  be  elected  to-day  will  take  up  this  question 
and  will  prepare  an  amendment  to  the  present  law  to  be 
submitted  to  the  Superintendent,  and,  with  his  approval, 
to  be  introduced  in  the  Legislature  next  year  to  definitely 
settle  this  matter. 

It  was  thought  best  that  at  this  meeting  the  topics  of 
discussion  be  confined  to  Savings  Bank  interests  by  Savings 
Bank  men,  except  the  Superintendent  of  BanJcs,  Hon. 
Charles  Harlan  Keep,  who  has  consented  to  be  with  us  and 
to  say  a  few  words.  As  these  topics,  I  am  sure,  will  be  of 
interest  to  you,  and  as  the  time  is  short,  I  shall  close  my 
remarks  to  give  longer  time  for  speaking  to  the  very  able 
orators  who  have  kindly  consented  to  discuss  these  subjects. 

RESOLUTIONS   ON  THE    DEATH  OF   MR.   RHOADES 

A  Committee,  consisting  of  Messrs.  Mills  and  Felsinger, 
which  had  been  appointed  to  prepare  a  minute  in  reference 
to  the  death  of  Mr.  Rhoades,  reported  as  follows: 

To  the  members  of  the  Savings  Banks  Association  of  the  State 

of  New  York: 

Gentlemen :  It  is  with  deep  sorrow  that  the  Executive 
Committee  of  the  Savings  Banks  Association  is  called  upon 
to  record  the  death  of  John  Harsen  Rhoades,  one  of  its 
most  prominent  members,  which  occurred  in  this  city, 
December  6,  1906. 

Mr.  Rhoades  had  been  a  trustee  of  the  Greenwich 
Savings  Bank  for  more  than  forty  years,  and  its  President 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    387 

for  twenty-nine  years.  He  was  a  public-spirited  man,  and 
gave  much  time  and  thought  to  all  efforts  on  behalf  of 
better  conditions  in  municipal  affairs,  but  his  paramount 
interest  was  the  safeguarding  the  interests  of  the  Savings 
Banks  of  this  State. 

For  several  years  previous  to  the  forming  of  the  Savings 
Banks  Association  it  had  been  the  custom  for  the  Savings 
Banks  of  the  State  to  meet  once  a  year  to  discuss  infor- 
mally such  matters  of  interest  as  might  be  brought  before 
the  convention.  It  soon  became  evident  that  a  closer 
and  more  formal  organization  would  be  much  more  effec- 
tive in  safeguarding  the  interests  of  the  banks,  and  in  May, 
i8q4,  it  was  decided  to  form  the  present  Association  with 
Mr.  Rhoades  as  its  President.  He  was  reelected  to  the 
office  for  five  successive  terms,  and,  much  to  the  regret  of 
the  members  of  the  Association,  refused  to  serve  longer. 

Much  was  accomplished  by  the  Association  during  Mr. 
Rhoades'  presidency,  and  too  much  credit  cannot  be  given 
him  for  his  part  in  bringing  about  the  much-desired  results. 
He  was  unfailing  in  his  loyalty  to  the  Association,  and  un- 
tiring in  his  efforts  in  its  behalf. 

As  the  Savings  Banks  increased  in  resources,  it  became 
evident  that  the  scope  of  investment  as  provided  in  the 
law  of  1875  must  be  enlarged  to  meet  the  new  conditions. 
For  years  efforts  had  been  made  to  bring  this  about,  but 
without  success,  until  the  bank  officers  were  ready  to 
abandon  the  idea  in  despair.  Mr.  Rhoades  never  faltered, 
and  each  failure  only  served  to  spur  him  to  renewed  effort, 
until  finally  the  bill  admitting  the  bonds  of  certain  cities 
in  other  States  than  New  York  was  passed,  and  a  measure 
of  relief  to  the  banks  afforded. 

Many  other  amendments  to  the  Savings  Bank  Law 
were  secured  by  the  Association  during  Mr.  Rhoades' 
active  connection  with  it,  due  in  no  small  measure  to  his 
personal  effort. 

Mr.  Rhoades  was  a  broad-minded  man,  of  excellent 
judgment,  strong  in  the  defence  of  what  he  deemed  right, 
and  fearless  in  his  denunciation  of  wrong.     The  Savings 


388  HISTORY  OF  THE  SAVINGS  BANKS 

Banks  Association  is  indebted  to  Mr.  Rhoades  for  much, 
and  places  upon  its  records  this  minute  in  grateful  recogni- 
tion of  his  service  and  in  loving  remembrance  of  the  man. 

Andrew  Mills, 
Wm,  Felslnger. 

bond  investments  of  savings  banks 

Mr.  Andrew  MiUs,  President  of  the  Dry  Dock  Savings 
Bank,  New  York,  read  a  paper  on  the  above  subject  as 
follows : 

At  the  urgent  request  of  the  Committee  in  charge  of  this 
meeting,  and  in  an  unguarded  moment,  I  consented  to 
prepare  a  paper  on  "  Bond  Investments  of  Savings  Banks." 
Itis  not  my  purpose,  in  presenting  this  subject,  to  lay  down 
any  hard-and-fast  rules  to  govern  the  actions  of  others, 
but  as  simply  as  possible  to  give  some  of  the  general  prin- 
ciples which  I  have  endeavored  to  follow  in  recommending 
investments  to  the  trustees  of  the  institution  over  which  I 
have  been  called  upon  to  preside.  I  doubt  if  I  can  say 
anything  new,  but  if  I  can  emphasize  the  necessity,  es- 
pecially in  times  hke  the  present,  of  "hewing"  close  to  the 
old  conservative  lines  which  have  made  our  Savings  Banks 
so  useful  and  strong,  my  poor  attempt  will  not  have  been 
made  in  vain. 

As  shown  by  the  Bank  Superintendent's  report  for  1906, 
out  of  the  total  assets  of  over  $1,464,000,000,  $644,  279,426 
represent  investments  in  bonds,  as  follows : 

United  States  and  District  of  Columbia     .      .  $10,488,180.00 

State  Bonds 51,183,340.65 

Bonds  of  cities  in  other  States 116,379,249.15 

Bonds  of  municipalities  in  this  State     .      .      .  236,469,859.15 

Railroad  Bonds 229,758,798.00 

$644,279,426.95 

For  the  purposes  of  this  paper  bond  investments  can  be 
divided  into  two  classes:  the  first  comprised  of  State  and 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    389 

municipal  bonds,  the  second  railroad  bonds.  United  States 
bonds  are  omitted,  as  their  interest  return  is  so  small 
that  any  investment  in  them  would  be  a  distinctly  losing 
proposition. 

The  principles  governing  investment  in  municipal  bonds 
are  few  and  simple.  An  investment  in  a  municipal  bond 
is  a  loan  upon  the  credit  of  a  city,  town,  or  village  without 
definite  collateral  security;  and  it  goes  without  saying  that 
almost  the  first  thing  to  be  established  is  whether  or  no  the 
municipahty  has  always  metits  obligations  promptly;  next, 
the  total  indebtedness  the  percentage  the  debt  bears  to 
the  assessed  value  of  taxable  property,  and  the  value  of  the 
property  actually  owned  by  the  municipality;  and  last,  but 
not  least,  the  availability  of  the  security  as  a  quick  asset  in 
case  of  necessity. 

Preference  has  been  given,  and  rightly,  in  many  cases  to 
bonds  issued  for  water  supply  purposes,  for  the  reason  that 
a  special  tax  is  levied  for  the  purpose  of  producing  an  in- 
come sufficient  to  pay  the  interest  on  the  obligation  and 
retire  the  principal  at  maturity,  thus  making  the  holder  of 
water  bonds  practically  a  preferred  creditor.  It  is  always 
advisable,  and  in  case  of  the  smaller  municipalities  a  ne- 
cessity, to  have  carefully  examined  all  proceedings  author- 
izing the  issue  of  bonds,  to  see  that  they  meet  with  all  the 
requirements  of  the  law  under  which  they  are  issued.  The 
importance  of  this  is  shown  by  the  fact  that  at  almost 
every  session  of  our  Legislature  one  or  more  bills  are  in- 
troduced making  valid  some  obligation  of  a  municipality 
in  the  issues  of  which  a  mistake  was  made. 

Investment  to  a  certain  extent  in  bonds  of  cities  outside 
of  this  State  is  desirable,  not  only  because  of  a  slightly 
increased  income  yield,  but  that  in  case  of  the  necessity 
of  realizing  you  have  a  security  marketable  in  money  cen- 
tres outside  of  New  York. 

When  the  Savings  Bank  Law  was  amended  so  as  to 
admit  railroad  bonds  under  certain  restrictions  as  legal 
investments,  the  banks  had  questions  of  an  entirely  differ- 
ent character  to  deal  with.     Some  contented  themselves 


390  HISTORY  OF  THE  SAVINGS  BANKS 

with  simply  asking:  "Is  this  bond  a  legal  investment?" 
and  then :  "  What  interest  return  does  it  yield?  "  giving  the 
preference  to  the  best-paying  investment.  While  I  believe 
that  all  bonds  admitted  under  our  very  carefully  prepared 
general  law  are  good,  still  of  necessity  some  must  be  more 
desirable  than  others,  and  in  my  opinion  none  is  too  good 
for  a  Savings  Bank. 

A  railroad  mortgage  bond  is  an  obligation  of  a  corpora- 
tion secured  by  a  lien  upon  certain  specified  property  as 
collateral.  The  deed  of  trust  or  mortgage  is  made  to  a 
trustee,  who,  in  the  event  of  the  corporation  failing  to  meet 
its  obligations  to  the  bondholders,  is  charged  with  the  duty 
of  foreclosing  the  lien,  selling  the  property,  and  paying  the 
bonds.  In  this  class  of  investments  the  credit  of  the  cor- 
poration, while  important,  is  secondary  to  the  value  of  the 
collateral,  which  is  paramount. 

Railroad  bonds  for  my  purpose  can  be  subdivided  into 
two  classes,  viz.:  first  mortgage  bonds  pure  and  simple, 
and  first  mortgage  refunding  bonds.  In  explaining  these 
different  classes  of  bonds,  when  railroads  or  systems  are 
named,  it  is  for  illustration  only. 

The  older  railroad  systems  are  for  the  most  part  a  group- 
ing together  under  one  management  and  control  of  a 
number  of  smaller  roads  formerly  operated  as  separate 
corporations.  Notable  examples  of  this  are  the  Chicago 
&  Northwestern  and  the  Chicago,  Milwaukee  &  St.  Paul. 

In  financing  the  building  of  the  original  roads  first  mort- 
gage bonds  were  issued,  and  these  have  been  assumed  or 
guaranteed  by  the  new  corporation.  After  these  consoli- 
dations in  almost  every  instance  the  roads  were  practically 
rebuilt.  Heavier  rails  were  laid,  steel  bridges  replaced 
wooden  ones,  while  others  were  strengthened,  to  carry 
heavier  trains.  All  of  this  vast  expenditure  greatly  in- 
creased the  value  of  the  collateral  without  increasing  the 
amount  of  the  first  mortgage.  For  some  time  after  the 
formation  of  these  systems,  whenever  a  new  division  or 
extension  was  built,  bonds  were  issued  secured  by  a  mort- 
gage on  the  newly  constructed  road ;  and  as  many  of  these 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    391 

have  not  as  yet  matured,  we  have  a  large  amount  of  under- 
lying securities  which  are  regarded,  in  the  parlance  of  Wall 
Street,  as  "gilt-edged."  The  only  objection  to  them  is  that 
they  are  rapidly  maturing,  and  before  many  years  will 
become  "things  of  the  past." 

To  provide  for  the  retirement  of  these  maturing  obliga- 
tions, the  railroads  for  the  most  part  adopted  the  policy 
of  issuing  refunding  bonds,  secured  by  a  mortgage  on  the 
entire  property,  which  were  intended  to  replace  the  old 
bonds  as  they  became  due  and  eventually  become,  in  fact, 
a  first  mortgage  on  the  whole  road. 

Some  roads  have  practically  completed  their  refunding 
operations  and  retired  all  underlying  bonds,  as,  for  exam- 
ple. New  York  Central,  Lake  Shore,  Chicago,  Burlington 
&  Quincy  (Illinois  Division),  and  others.  In  all  such 
cases  the  refunding  mortgage  is  "closed,"  the  indebtedness 
fixed,  and  no  more  bonds  can  be  issued  under  it . 

Information  on  which  to  base  judgment  in  case  of  a 
municipal  bond  is  for  the  most  part  easily  obtained,  as  all 
the  data  required  are  matters  of  record;  in  fact,  nowadays 
the  bond  dealer  offering  bonds  for  sale  furnishes  the  in- 
formation unasked. 

The  value  of  the  railroad  bond  is  primarily  determined 
by  the  earnings  of  the  corporation,  and  these  can  be  learned 
from  the  reports  to  stockholders  and  to  the  Interstate 
Commerce  Commission.  With  the  railroad  manuals, 
financial  publications,  railroad  maps,  digest  of  mortgages 
so  numerous,  it  would  seem  that  the  desired  information 
is  within  the  reach  of  all. 

Many  of  the  railroad  bonds  legal  for  Savings  Banks  have 
the  advantage  of  an  international  market,  so  that  in  case 
of  a  necessity  to  sell  at  a  time  of  money  stringency  in  New 
York  and  easier  conditions  prevailing  in  London,  Berlin, 
or  Amsterdam,  they  could  be  easily  disposed  of  without 
sacrifice.  All  that  I  have  said  may  not  be  of  much  value, 
but  before  closing  I  wish  to  emphasize  what  I  consider  the 
cardinal  principles  that  should  govern  the  investing  of 
Savings  Bank  deposits: 


392  HISTORY  OF  THE  SAVINGS  BANKS 

1.  Security,  as  absolute  as  human  judgment  can  deter- 
mine. 

2.  The  first  being  assured,  then  the  security  yielding  the 
larger  income. 

3.  Availability,  so  that  in  case  of  necessity  the  security 
can  be  disposed  of  without  needless  sacrifice. 

Air.  Miller,  of  Utica:  I  am  ver>-  glad  that  Mr.  JMills 
emphasized  the  necessity  of  looking  at  something  in  bond 
investments  besides  the  mere  question  of  legality  and  the 
question  of  interest  return,  and  it  is  to  further  emphasize 
the  necessity  of  our  looking  in  every  instance,  especially 
in  regard  to  railroad  bond  investments,  into  the  genuine- 
ness of  the  character  of  the  security  itself,  that  I  want  to 
speak  now,  and,  particularly,  for  this  reason,  that  there 
is  a  danger  growing  out  of  our  general  law  for  Savings 
Banks  respecting  railroad  mortgage  bonds  that  I  think 
should  be  pointed  out  and  fully  realized.  It  is  not  a  dan- 
ger to  the  security,  it  is  not  a  danger  to  the  banks  in  the 
sense  that  loss  can  grow  out  of  it,  and  yet  it  seems  to  me 
it  must  be  guarded  against. 

You  will  remember  that,  under  the  present  law,  railroad 
mortgage  bonds  become  legal  when  the  road  has  complied 
with  certain  conditions  for  the  period  of  five  years.  Now 
we  have  had  five  very  good  years  and  the  consequence  is 
that  many  roads  have  begun  to  comply  with  the  conditions 
which  we  have  provided.  Should  their  prosperity  con- 
tinue for  the  next  five  years  as  it  has  in  the  past  five  years, 
there  would  be  substantially  $140,000,000  of  new  securities 
legalized  automatically  under  our  act. 

One  bad  year  will  undo  the  work  of  five  good  years.  If 
a  corporation  has  complied  for  five  years  with  all  the  re- 
quirements of  the  law  and  its  bonds  have  just  become  legal, 
by  one  bad  year  breaking  its  record  those  bonds  will  be- 
come illegalized.  WTiat  I  want  to  urge  in  the  first  place 
is  this:  We,  all  of  us,  should  be  careful  not  to  buy  the 
very  latest  bond  that  has  just  become  legal  by  having 
barely  complied  for  five  years  with  the  requirements  of  the 
law,  because  we  have  had  no  bad  year  in  which  to  test  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    393 

character  of  the  road.  I  mention  these  simply  because 
they  are  late  comers.  The  Atchison  road  will,  by  the  first 
of  July,  have  complied  for  five  years  with  every  require- 
ment. Next  year  by  a  faUing  off  in  its  earnings,  or  by 
failing  to  earn  and  pay  its  dividend,  it  may  cease  to  comply 
with  the  requirements  of  the  law  and  its  bonds  will  then 
become  illegal.  They  won't  become  bad.  We  won't 
have  to  sell  them.  Still  most  of  us  would  feel  ashamed  in 
having  an  illegal  investment  on  our  list  and  we  might 
therefore  sell  them  at  a  loss.  But  the  point  to  be  borne 
in  mind  is  that  it  is  not  good  poUcy  to  buy  the  very  latest 
bond  or  one  that  has  just  become  legal. 

There  is  one  other  thing  worthy  of  mention.  You  will 
remember,  in  framing  the  law,  we  regarded  two  things 
essential:  first,  the  credit  of  the  road,  which  we  provided 
for  by  saying  that  it  must  never  have  failed  to  pay  its 
interest,  and  that  its  gross  earnings  must  be  five  times  its 
fixed  charges,  and  the  road  must  for  a  period  of  five  years 
have  maintained  the  very  highest  personal  credit.  We 
have  provided  also  that  the  mortgages  securing  the  bonds 
must  be  of  a  very  high  class.  I  will  not  go  into  details, 
but  there  are  many  other  things  we  provided  for.  The 
road  must  own  five  hundred  miles  at  least  in  fee  and  the 
mortgage  must  cover  two  thirds  of  that,  so  that  any 
mortgage  bond  that  we  would  be  allowed  to  buy  must  cover 
a  very  large  amount  of  the  mileage  with  a  single  exception. 
It  was  found  in  drawing  our  act  that  a  few  roads  whose 
bonds  were  legal  under  the  old  law  had  a  very  good  bond 
issue  but  a  very  small  mileage.  Those  roads  were  the 
Delaware  &  Hudson,  the  Delaware,  Lackawanna  &  West- 
ern, the  New  Haven,  the  Michigan  Central,  the  Pittsburgh, 
Fort  Wayne  &  Chicago,  and  the  New  Jersey  Central. 
All  of  them  were  legal  at  that  time  and  all  have  been  con- 
tinued as  legal  under  the  provisions  of  our  act  which  state 
that  the  five-hundred-mUe  requirement  may  be  dispensed 
with  if  the  road  has  a  total  earning  of  $10,000,000  a  year; 
not  a  single  new  road  has  been  legalized  up  to  this  time 
under  that  provision.     But  as  one  looking  ahead  I  can 


394  HISTORY  OF  THE  SAVINGS  BANKS 

conceive  of  a  possibility  of  something  different.  For  ex- 
ample, the  Southern  Pacific  is  a  Kentucky  corporation 
and  owns  in  fee  just  seven  miles  of  railroad.  It  has  enor- 
mous earnings,  much  over  the  $10,000,000  requirement, 
but  in  a  number  of  other  respects  it  does  not  approach 
complying  with  our  statute.  It  is  possible  that  at  the  end 
of  five  years  the  Southern  Pacific  may  have  complied  with 
all  of  our  requirements.  In  that  case  a  mortgage  secured 
upon  that  seven  miles  of  road  and  further  secured  by  all 
the  leaseholds  of  the  Southern  Pacific  might  become  a 
legal  investment,  and  it  may  perhaps  be  a  good  one  at  that 
time,  I  cannot  say.  It  seems  to  me,  however,  that  a  se- 
curity of  that  kind  would  be  very  weak,  and  on  that  ac- 
count we  ought  all  of  us  to  look  over  carefully  any  bond 
propositions  and  be  very  sure  that  any  new  bonds  which 
become  legalized  from  now  on  cover  at  least  mileage  suffi- 
cient to  make  them  amply  safe. 

I  have  sometimes  thought  that  it  might  be  wise  if  the 
Association  should  charge  itself  with  the  responsibility  of 
advising  us  bankers  if  it  saw  danger  in  a  bond  or  one  of 
which  it  could  not  approve.  So  far  as  I  know,  I  do  not 
think  a  single  bond  has  become  legal  which  we  would  want 
to  dispose  of.  The  fact  that  our  scope  has  so  widened 
emphasizes  the  absolute  necessity  of  making  a  careful 
study  of  the  intrinsic  merits  of  each  proposition  as  it  pre- 
sents itself,  and  it  is  for  that  that  I  am  speaking,  and  it  is 
that  policy  that  I  am  urging. 


"mortgages  ' 

The  following  address  was  given  by  Mr.  Chas.  L.  Stone, 
of  the  Onondaga  County  Savings  Bank,  of  Syracuse: 

I  appreciate  the  honor  of  the  opportunity  to  address 
this  Association,  afforded  by  the  courteous,  though  un- 
merited, designation  of  your  Executive  Committee.  I  am 
also  impressed  with  becoming  modesty,  in  attempting  to 
say  a  word  of  interest  upon  a  subject  which  has  presumably 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    395 

already  received  much  and  intelligent  consideration  by 
you. 

You,  gentlemen,  are  the  heads  and  managers  of  a  group 
of  institutions  not  merely  representing  a  vast  accumulated 
aggregate  of  money  and  investments,  but  a  group  of  in- 
stitutions which  have  been  so  closely  identified  with  the 
stability  of  our  institutions  and  with  the  growth  of  our 
State  that  they  have  long  engaged  my  profound  interest 
and  respect.  For  this  reason,  and  because  for  twenty-five 
years  my  work  has  been  somewhat  closely  associated  with 
one  of  these  institutions,  and  I  have  thus  been  led  to  take 
note  from  time  to  time  of  the  development  of  the  principle 
embodied  in  all  of  them,  I  have  the  more  readily  availed 
myself  of  the  opportunity  to  engage  your  attention  for  a 
few  moments  in  the  consideration  of  the  assigned  topic. 

With  more  time  and  opportunity  for  the  consideration 
and  presentation  of  its  larger  aspects  and  relations,  the 
subject  would  be  one  of  very  great  interest. 

The  derivation  of  the  word  indicates  a  relation  to  death. 
In  the  early  days  of  English  law  a  real-estate  mortgage 
was  widely  considered  to  be  the  "hand  of  death"  laid  upon 
the  ownership  of  the  property  involved.  Sir  William 
Blackstone  defined  it  as  the  "dead  pledge."  Its  early 
legal  effect  was  to  absolutely  transfer  the  title  of  the  land 
to  the  mortgagee,  subject  only  to  the  strict  performance 
of  his  covenant  by  the  mortgagor.  In  default  of  such  per- 
formance, no  matter  what  relation  existed  between  the 
value  of  the  loan  and  the  value  of  the  property,  the  land 
and  property  were  thereafter  "dead"  to  the  former  owner, 
and  the  title  of  the  mortgagee  by  virtue  of  the  mortgage 
itself  became  absolute. 

The  strict  doctrine  of  the  Common  Law  has  been  modi- 
fied under  the  more  benign  administration  of  Courts  of 
Equity,  by  the  development  of  the  doctrine  that  the  real 
purpose  of  the  original  transaction  should  be  made  effec- 
tual, by  treating  the  mortgage  as  a  security  for  the  per- 
formance of  the  obligation.  So  that  now  it  is  generally 
true  that  while  the  form  of  instrument  remains  much  the 


396  HISTORY  OF  THE  SAVINGS  BANKS 

same,  the  lender  of  the  money  must  be  content  with  its 
payment  after  default,  and  until  the  right  of  making  such 
pa3ment  shall  be  "foreclosed"  by  a  public  sale  of  the 
property.  And  any  surplus  of  its  value  thus  realized 
beyond  the  just  demands  of  the  mortgagee  will  be  re- 
turned to  the  mortgagor.  And  so  it  has  come  about  in  the 
e^'olution  of  the  times  that  the  mortgage  has  increasingly 
become  an  important  factor  in  the  enlargement  of  the  busi- 
ness of  the  world  and  the  development  of  modem  civiliza- 
tion. From  a  "dead  pledge"  it  has  become  a  vital  force. 
By  its  aid  railroads  have  been  built,  numberless  homes  and 
great  areas  of  business  blocks  have  sprung  up,  assessment 
rolls  have  been  swollen,  and  the  revenues  of  States  and 
municipahties  available  for  pubUc  purposes  have  increased 
in  geometric  ratio. 

In  this  State  the  Savings  Banks  have  borne  no  small 
part  in  thus  aiding  the  wonderful  evolution  and  increase 
in  the  values  of  real  estate.  It  is  a  matter  of  common 
obser^^ation  that  a  large  fraction  of  the  money  expended 
in  the  erection  of  buildings  for  all  purposes,  pubHc  and  pri- 
vate, business  and  residential,  was  originally  derived  by 
loan  upon  mortgage  security.  As  men  and  institutions 
have  prospered,  these  loans  have  been  paid  and  the  money 
has  gone  out  again  and  again  for  the  same  purpose,  so  that 
the  same  funds  with  the  increase  furnished  b}'  the  ever- 
increasing  deposits  have  for  generations  gone  out  into  the 
enhancement  of  the  values  of  real  estate  and  have  contrib- 
uted to  the  success  of  the  business  conducted  thereon. 
The  statistics  to  show  the  extent  of  such  contributions  by 
the  Sa\dngs  Banks  of  the  State,  I  suppose,  are  not  available. 
The  amount  of  such  loans  just  now  outstanding  afford  but 
a  meagre  indication  of  what  has  been  done.  This  may  be 
said,  however,  in  that  connection.  The  total  assessed 
valuation  of  real  estate  in  the  State  of  New  York  for  the 
year  1905  was  $7,312,621,452,  of  which  about  $350,000,000 
represented  special  franchise  assessments.  The  outstand- 
ing loans  of  the  Savings  Banks  of  the  State  upon  real- 
estate  mortgages  at  the  close  of  that  year  was  $639,742,227, 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    397 

or  approximately  ten  per  cent,  of  the  aggregate  assessed 
value  of  all  the  lands  and  buildings  in  the  State.  January 
ist  of  this  year  the  total  mortgage  loans  of  the  Savings 
Banks  amounted  to  $688,066,201. 

Another  avenue  through  which  the  investment  of  the 
funds  of  Savings  Banks  has  operated  with  great  emphasis 
to  the  public  advantage  has  been  their  holdings  of  munici- 
pal securities.  A  large  portion  of  the  money  for  public 
improvements  represented  by  the  bonds  of  the  cities  of  the 
State  has  come  at  a  low  rate  of  interest  from  these  institu- 
tions. I  refer  to  this  fact  incidentally  in  connection  with 
the  observations  upon  the  subject  of  mortgage  loans,  in 
order  to  emphasize  a  suggestion  that  there  are  ample 
reasons  other  than  those  relating  to  the  character  of  the 
deposits  in  Savings  Banks  and  of  their  pliilanthropic  pur- 
pose,arising  out  of  direct  financial  public  benefits  conferred, 
why  the  generous  and  even  partial  consideration,  which 
until  within  the  last  decade  or  so  had  uniformly  charac- 
terized the  policy  of  the  State  toward  these  institutions, 
should  be  renewed,  continued,  and  emphasized. 

Coming  now  to  a  brief  consideration  of  the  quality  of 
real-estate  mortgages  as  an  investment  of  Savings  Bank 
funds :  I  am  of  opinion  that  upon  the  whole,  in  the  long  run, 
and  within  the  limitations  of  the  statute  as  to  the  amount 
of  such  investments  and  as  to  the  percentage  of  value 
which  may  be  loaned  upon  real  estate,  that  this  is  the  most 
desirable  form  of  investment  available.  The  disparity 
between  the  income  to  be  had  from  this  form  of  investment 
and  from  investment  in  municipal  and  railroad  bonds  is 
not  so  great  as  it  was  a  few  years  since.  Even  so,  at  least 
with  the  qualifications  stated,  I  believe  that  the  Savings 
Banks  should  seek  mortgage  investments.  The  law  limits 
these  to  sixty-five  percentum  of  the  whole  amount  of  de- 
posits and  each  loan  to  sixty  percentum  of  the  real  estate 
taken  as  security.  Upon  a  reasonable  application  of  the 
rule  concerning  valuation,  and  with  reasonable  supervision 
and  occasional  revaluation,  such  loans  may  be  considered 
as  safe  as  any  municipal  or  railroad  security. 


398  HISTORY  OF  THE  SAVINGS  BANKS 

Stability  of  value  should  be  a  paramount  consideration  in 
the  investment  of  trust  funds.  The  element  of  speculation 
is  not  permissible.  The  funds  to  be  invested  are  the  ac- 
cumulated small  surpluses  of  many  wage-earners  laid  up 
against  "a  rainy  day."  The  prime  consideration  is  the 
sure  return  of  the  principal  sum.  The  income  to  be  de- 
rived, while  important,  is  secondary.  The  actual  tangible 
property  which  stands  as  security  is  at  all  times  within  easy 
observation,  and  its  value  can  be  satisfactorily  and  readily 
determined  upon  the  knowledge  of  the  trustees  who  make 
the  investment.  The  slight  percentage  of  loss  sustained 
from  investments  of  this  character  may  be  approximately 
estimated  by  an  examination  of  the  reports  of  the  Savings 
Banks  for  a  series  of  years.  The  item  of  "  other  real  estate" 
shows  with  a  reasonable  degree  of  approximation  the  amount 
of  default  upon  such  obligations,  and  some  fraction  of  that 
item  would  represent  the  actual  loss  upon  such  investments. 

The  published  report  of  the  Superintendent  of  Banks  for 
the  first  of  January,  1906,  indicates  a  total  of  nearly  six 
hundred  and  forty  millions  of  dollars  thus  invested,  while 
the  estimated  market  value  of  "other  real  estate"  on  hand 
is  under  three  and  one  half  million  dollars,  or  a  little  more 
than  one  half  of  one  per  cent,  upon  the  present  investment. 
While  the  cost  of  such  property  may  exceed  its  "estimated 
market  value,"  I  apprehend  that  such  excess  would  be  a 
rather  small  percentage  of  the  one  half  of  one  per  cent, 
mentioned.  I  believe  it  may  be  fairly  said  that  upon  the 
aggregate  of  such  investments  the  percentage  of  loss  en- 
tailed in  a  series  of  years  is  an  almost  negligible  quantity. 

In  April,  1898,  the  first  law  was  enacted  permitting 
Savings  Banks  of  this  State  to  invest  in  railroad  bonds. 
By  that  Act  such  investments  were  limited,  among  other 
things,  to  the  first  mortgage  bonds  of  railroad  corporations 
of  this  State,  the  principal  part  of  whose  railroad  is  located 
within  the  State.  Within  the  remaining  nine  months  of 
that  year  nearly  nine  millions  of  dollars  was  invested  in 
such  securities, and  such  investments  rapidly  grew  in  favor. 

The  report  of  the  first  of  January  last  will  show  nearly 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    399 

two  hundred  and  thirty  million  dollars  thus  invested  by 
the  Savings  Banks  of  the  State.  Taking  the  bonds  of  the 
New  York  Central  Railroad,  which  were  thus  open  to 
such  investment,  as  an  example,  it  will  appear  that  within 
the  period  of  eight  years  there  has  been  an  extreme  fluctua- 
tion in  the  market  value  of  twenty  and  one  half  per  cent, 
from  one  hundred  and  twelve  and  one  half  in  the  year  1899 
to  ninety- two  in  the  year  1906.  Within  the  year  1903 
there  was  a  fluctuation  of  ten  per  cent.,  and  the  variation 
in  price  has  been  less  than  two  and  one  half  per  cent,  in 
only  two  of  the  years  since  they  became  available.  These 
bonds  bear  three  and  one  half  per  cent,  interest,  and  until 
the  year  1906  were  purchasable  only  above  par.  In  other 
words,  the  investments  therein  generally  paid  less  than 
the  dividends  paid  upon  the  deposits  so  invested. 

Some  relief  was  needed  for  the  congestion  of  money 
when  the  legislation  had  its  inception.  I  think  the  plan 
pursued  of  permitting  such  investments  by  degrees  from 
time  to  time  and  in  specified  bonds  only  was  unfortunate. 
Had  a  general  scheme  of  authority  been  originally  adopted, 
similar  in  character  to  that  of  the  bill  enacted  a  few  years 
ago  in  the  framing  and  preparation  of  which  the  present 
Chairman  of  your  Executive  Committee  bore  so  important 
a  part,  the  stream  of  money  seeking  such  investment  being 
spread  over  a  wide  area,  the  price  level  of  the  bonds  would 
not  have  risen  so  high  and  some  of  the  evils  which  have 
resulted  would  have  been  avoided.  Similar  fluctuations 
in  value  have  attended  investments  in  municipal  bonds. 
I  do  not  refer  to  these  well-known  facts  for  the  purpose  of 
condemning  the  policy  of  the  State  in  permitting  such  in- 
vestments of  either  class,  but  rather  by  contrasting  these 
market  values  with  the  stability  of  the  mortgage  invest- 
ments to  illustrate  what  I  deem  to  be  the  superior  quality 
of  the  latter  over  the  former  as  Savings  Bank  investments. 

Without  trespassing  too  much  upon  your  time,  I  think 
that  the  argument  may  be  further  enforced  by  some  com- 
parison of  the  condition  of  the  banks  now  and  at  a  time 
just  before  investment  in  railroad  bonds  was  permitted. 


400  HISTORY  OF  THE  SAVINGS  BANKS 

Notwithstanding  the  lack  of  a  fixed  standard  by  which 
the  value  of  securities  of  the  same  class  shall  be  stated  in 
their  reports  by  all  Savings  Banks  alike,  I  know  of  no 
surer  index  of  the  security  and  stability  of  a  savings  in- 
stitution than  the  percentage  of  its  market  value  surplus 
upon  the  amount  of  its  deposits. 

In  1897  the  average  percentage  of  such  surplus  of  all 
the  Savings  Banks  in  the  State  was  over  thirteen  and  one 
third  per  cent.  On  the  first  of  January,  1907,  computed 
in  the  same  way,  such  average  surplus  was  but  a  trifle  more 
than  seven  and  one  half  per  cent.  In  1897  but  five  were 
below  seven  and  one  half  per  cent.  In  1907  twenty-nine 
were  below  that  figure!  In  1897  eleven  reported  between 
seven  and  one  half  and  ten  per  cent.  In  1907  nine  made 
such  reports.  In  1897  sixteen  reported  from  ten  to  fifteen 
per  cent.  In  1907  seven  made  such  report.  In  1897  thir- 
teen reported  a  surplus  over  fifteen  per  cent.,  while  in  1907 
but  one  made  a  similar  report. 

If  to  the  surplus  of  1907  we  should  add  the  difference 
between  the  highest  and  lowest  prices  for  New  York  Cen- 
tral bonds,  computed  upon  the  amount  of  railroad  bonds 
held,  the  market  value  surplus  would  be  increased  to  over 
eleven  per  cent.  In  1897  the  Savings  Banks  held  over  one 
hundred  million  dollars  of  U.  S.  bonds,  nearly  one  eighth 
of  the  then  total  Government  indebtedness.  Last  year 
this  item  had  fallen  to  something  less  than  ten  and  one 
half  million  dollars. 

While  thus  urging  the  wisdom  of  increased  investments 
in  real-estate  mortgages,  I  am  not  unmindful  that  those 
of  the  class  desired  are  not,  and  are  not  likely  to  be,  so 
easily  obtainable  at  favorable  interest  rates  as  formerly. 
Under  the  mode  of  taxation  here  prevaiHng  until  a  few 
years  ago  the  Savings  Banks  had  a  material  advantage 
over  other  investors  seeking  mortgage  loans,  because  of 
the  Savings  Bank  exemption  from  taxation.  Under  the 
mode  just  now  prevailing  that  advantage  has  been  re- 
moved. The  recording  tax  relieves  all  mortgages  aUke 
from   subsequent  taxation.     While   I  beUeve  there   are 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   401 

advantages  to  borrowers  in  making  such  loans  of  the 
Savings  Banks,  it  is  not  to  be  overlooked  that  this  change 
in  the  law  will  probably  bring,  and  I  think  has  already 
brought,  important  sums  of  money  into  the  market  for 
which  such  investments  were  formerly  hardly  available. 
The  effect  of  such  increase  of  funds  open  to  mortgage 
investment  upon  the  rates  of  interest  to  be  made  therefrom 
is  to  be  determined  later,  but  requires  consideration. 

I  am  aware  that  the  topic  assigned  to  me  has  by  no 
means  had  an  exhaustive  consideration.  I  only  hope  that 
such  consideration  as  it  has  received  has  not  exhausted 
your  patience.  I  think  the  subject  of  sufficient  impor- 
tance to  warrant  the  careful  consideration  of  all  of  us  who 
are  charged  with  responsibilities  concerning  the  invest- 
ment of  Savings  Bank  funds. 

Mr.  Mills:  I  am  greatly  in  favor  of  mortgage  invest- 
ments. In  fact,  we  have  over  fifty — nearly  sixty — ^per 
cent,  of  our  deposits  so  invested;  but  I  have  been  through 
a  good  deal  of  experience  in  the  real-estate  market  as  well 
as  in  the  bond  market,  and  I  want  to  call  the  attention  of 
the  gentlemen  to  this  fact  that  from  1873  until  1878  the 
real-estate  owner  was  practically  denied  credit  in  the 
commercial  agencies'  reports  in  New  York,  and  it  was  said 
as  an  additional  reason  why  a  man  should  receive  credit 
that  he  owned  no  real  estate.  I  simply  state  this  in  order 
to  show  you  that  there  can  be  ups  and  downs  in  the  real- 
estate  market  as  well  as  in  the  bond  market.  We  have 
made  some  loans  on  property.  When  a  man  paid  $27,000 
for  a  piece  25  by  100,  with  a  five-story  house  on  it,  in  the 
lower  part  of  this  city,  we  loaned  $9,000  on  it,  and  if  we 
had  wanted  to  we  could  have  bought  that  in  under  fore- 
closure. That  the  Savings  Banks  did  not  own  all  the  real 
estate  during  that  time  was  due  to  the  fact  that  we  were 
level-headed  men  and  refused  to  foreclose  the  mortgages 
because  if  we  had  we  would  have  owned  most  all  of  it. 

At  the  present  time  the  real-estate  conditions  existing 
in  certain  parts  of  this  city  call  for  a  good  deal  of  caution 
and  especially  as  these  gentlemen  who  are  officers  of  Sav- 


402  HISTORY  OF  THE  SAVINGS  BANKS 

ings  Banks  up  the  State  are  lending  money  upon  reports 
furnished  by  the  New  York  people.  There  are  certain 
sections  of  this  city  that  could  not  borrow  one  dollar  from 
the  Dry  Dock  Savings  Bank,  although  the  loan  would  be 
within  the  Hmit  of  the  Savings  Bank  Law. 

The  reason  for  the  bond  fluctuations  has  been  the  change 
in  the  money  market.  When  the  three  and  one  half  per 
cent,  bonds  of  the  New  York  Central  were  bought  at  a 
premium,  New  York  City  bonds  were  selling  on  a  three 
per  cent,  basis  or  even  lower;  and  the  reason  that  these 
bonds  were  bought  was  because  the  return  to  the  investor 
was  so  much  greater  than  the  ordinary  municipal  bond. 
There  was  a  plethora  of  money  in  this  and  every  other  finan- 
cial centre  and  that  caused  high  prices.  Now  things 
have  changed.  Development  in  this  section,  the  demand 
for  money  in  business  and  in  different  enterprises  through- 
out the  length  and  breadth  of  our  land,  is  something  un- 
precedented. Consequently  the  rate  of  interest  has  risen 
and  the  price  of  bonds  has  fallen.  There  has  been  a  boom 
in  real  estate  in  certain  sections,  and  loans  that  have  been 
made  by  lending  institutions  are  such  that,  when  the  time 
comes,  you  will  look  just  as  ruefully  on  the  shrinkage  in 
your  mortgage  loans  as  you  do  on  the  shrinkage  in  your 
bond  investments  to-day. 

As  far  as  I  am  concerned  I  would  oppose  with  all  the 
force  that  I  have  any  increase  of  the  percentage  that 
Savings  Banks  can  lend  upon  property.  I  think  sixty 
per  cent,  is  enough.  I  would  be  very  much  opposed  to 
any  increase.  The  fact  that  trustees,  life-insurance  com- 
panies, and  trust  companies  can  lend  to  the  amount  of 
two  thirds  I  do  not  think  affects  us  at  all.  I  think  sixty  per 
cent,  is  the  limit  of  safety,  and  on  account  of  the  fluctua- 
tions that  are  liable  to  happen  to  real  estate,  to  which  I 
have  aUuded,  I  would  oppose  it  most  strenuously. 

ADDRESS  OF  SUPERINTENDENT  KEEP 

The  following  address  was  given  by  Mr.  Charles  H. 
Keep,  State  Superintendent  of  Banks: 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   403 

Gentlemen :  I  am  glad  of  this  opportunity  to  meet  the 
Savings  Bank  men  of  this  State.  I  am  here  for  that 
purpose  and  not  to  make  an  address.  You  represent  in- 
stitutions of  which  the  State  of  New  York  is  justly  proud 
— ^proud  of  the  banks,  proud  of  the  men  who  manage  them, 
proud  of  the  laws  that  govern  them,  proud  of  the  stupen- 
dous record  of  their  usefulness  disclosed  in  a  safe  guardian- 
ship of  $1,400,000,000.  For  some  years  I  have  come  in 
contact  with  bankers  from  all  parts  of  the  United  States, 
largely  in  connection  with  the  deposit  by  the  United  States 
Government  of  public  funds  in  more  than  1,200  depository 
banks.  A  large  proportion  of  these  funds  are  deposited 
on  the  security  of  bonds  "such  as  are  lawful  investments 
for  New  York  and  Massachusetts  Savings  Banks."  The 
laws  governing  your  investments  are  the  standard  enact- 
ments for  the  safekeeping  of  depositors'  money.  Other 
States  envy  New  York  its  Savings  Bank  system,  where  the 
business  of  keeping  the  savings  of  the  poor  is  kept  separate 
from  profit-making.  By  this  separation  you  are  enabled  to 
pay  good  interest  to  your  depositors,  and  yet  to  give  them 
unequalled  security.  Where  the  care  of  savings  deposits 
is  not  kept  separate  from  profit-making,  the  tendency  is 
to  pay  depositors  as  much  interest  as  you  pay  but  to  invest 
their  funds  less  safely.  If  our  Savings  Bank  system  has  a 
weak  spot  it  lies  in  its  partial  failure  on  the  ground  of 
accessibihty.  Men  will  save  if  they  pass  the  door  of  a 
Savings  Bank  daily,  but  will  put  off  the  day  for  saving  if 
they  have  to  go  twenty  or  thirty  miles  by  train  to  a  Sav- 
ings Bank,  and  take  a  day  off  from  their  usual  occupation 
for  the  purpose.  A  strong  argument  for  Postal  Savings 
Banks  is  their  accessibility.  This  argument  gains  strength 
if  other  systems  fail,  or  partially  fail,  in  this  particular. 
We  find  trust  companies  in  other  States  advertising  in  New 
York  State  publications  for  savings  deposits  to  be  sent  by 
mail.  Our  own  trust  companies  and  banks  are  opening 
"Interest  Departments"  and  adopting  the  pass-book 
system,  the  Savings  Bank  system  of  dealing  with  deposi- 
tors.   This  has  been  declared  legal  by  the  highest  court 


404  HISTORY  OF  THE  SAVINGS  BANKS 

of  the  State.  This  is  increasing  very  rapidly.  Almost  the 
only  protection  left  to  the  Savings  Banks  is  the  statute 
forbidding  the  use  of  the  word  "savings''  by  other  institu- 
tions in  their  title  and  in  their  advertisements.  National 
banks  claim  that  even  this  statute  is  not  binding  upon 
them.  In  the  meantime  half  the  counties  of  the  State 
have  no  Savings  Banks,  none  have  been  organized  for 
years  outside  of  the  City  of  New  York,  and  none  are  likely 
to  be  organized.  How  far  is  the  inaccessibility  of  our 
Savings  Banks  to  savings  depositors  responsible  for  the 
rapid  growth  of  interest  paying  and 'interest departments" 
in  other  banking  institutions,  State  and  national?  This  is 
worthy  of  your  consideration.  The  Banking  Department 
has  favored  branch  Savings  Banks,  but  I  am  told  that 
Savings  Banks  generally  take  little  interest  in  this  sugges- 
tion. The  recommendation  will  naturally  meet  some  op- 
position from  people  who  are  now  getting  a  profit  from 
strictly  savings  deposits.  The  recommendation  will  be 
futile  if  the  Savings  Banks  themselves  take  no  interest  in 
the  establishment  of  branches.  It  would  seem  that  such 
branches  could  be  very  economically  operated.  They 
could  be  limited  to  a  certain  territory  around  the  main 
institution.  They  need  not  be  allowed  in  places  where 
there  is  already  a  Savings  Bank  or  branch  Savings  Bank. 
Are  there  sound  reasons  that  can  be  urged  against  these 
branches,  or  is  the  lack  of  interest  perhaps  to  some  extent 
a  consequence  of  that  feature  of  our  Sav^ings  Bank  system 
already  referred  to — namely,  that  such  banks  do  not  exist 
for  profit?  Does  this  fact  take  away  somewhat  from  the 
incentive  to  take  on  new  responsibilities?  Does  it  promote 
a  willingness  to  let  well  enough  alone?  There  are  many 
factory  towns  and  industrial  communities  in  this  State 
without  Savings  Banks,  and  not  likely  to  have  any,  where 
the  thrifty  must  go  twenty  or  thirty  miles  by  rail  to  find 
a  place  to  take  out  pass-books.  How  are  their  require- 
ments to  be  met?  xAt  present,  in  so  far  as  they  are  met  at 
all,  it  is  by  a  confused  mingling  of  functions  by  banks 
of  discount,  trust  companies,  and  Savings  Banks,  by  a 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   405 

process  which  is  rapidly  wiping  out  the  distinction  be- 
tween these  different  classes  of  institutions.  Banks  of 
discount  and  trust  companies  are  invading  each  other's 
field,  and  both  are  invading  the  field  of  the  Savings 
Banks. 

A  word  about  an  entirely  different  matter :  In  January 
last  the  Savings  Banks  were  first  required  by  the  Banking 
Department  to  place  upon  the  blank  form  calling  for  the 
bank's  earnings  and  expenses  an  amount  to  be  deducted 
from  earnings  for  amortization,  that  is,  to  absorb  premium 
paid  for  bonds  at  maturity.  This  information  is  certainly 
necessary  to  enable  the  Banking  Department  to  know 
whether  a  bank's  real  earnings  and  income  are  sufficient 
to  pay  the  interest  to  its  depositors  which  it  is  attempting 
to  pay.  The  note  of  explanation  on  the  blank  form  was 
confusing,  and  there  was  some  misunderstanding,  which 
was  set  right  by  correspondence.  For  the  time  being 
a  rough  and  unscientific  amortization  is  accepted  by  the 
department.  Perhaps  for  practical  purposes  of  the  Bank- 
ing Department  tliis  is  sufficient,  but  many  banks  have 
determined  to  have  a  scientific  and  accurate  amortization 
as  part  of  their  bookkeeping  system,  and  the  question  arises 
whether  a  rough  and  unscientific  amortization  should  be 
accepted  indefinitely  by  the  Banking  Department,  or 
whether  a  reasonable  date  should  be  fixed  when  an  accu- 
rate amortization  wiU  be  required. 

I  am  glad  to  inform  you  that  the  Banking  Department 
has  begun  the  work  of  simplifying  and  shortening  the 
blanks  and  forms  sent  out  to  the  Savings  Banks.  In- 
formation will  not  be  asked  for  unless  the  department 
can  make  some  use  of  it  when  given.  The  blanks  to 
be  sent  out  for  July  ist  will  not  be  so  voluminous  as 
formerly.  Probably  they  can  be  still  further  simplified  in 
the  future. 

I  shall  at  all  times  welcome  suggestions  from  you  gen- 
tlemen looking  to  improvements  in  the  department's  ex- 
aminations of  Savings  Banks,  and  in  any  of  its  methods  of 
deahng  with  the  Savings  Banks  of  the  State. 


4o6  HISTORY  OF  THE  SAVINGS  BANKS 

AMORTIZATION 

The  following  address  was  given  by  Mr.  Chas.  E. 
Sprague,  Union  Dime  Savings  Institution,  New  York,  on 
"Amortization": 

Mr,  President  and  Gentlemen :  The  word  amortization* 
in  the  minds  of  some  of  our  colleagues  has  been  confounded 
with  morphine,  just  the  same  as  the  word  mortgage  has 
been  confounded  with  dead  pledge.  I  do  not  apprehend 
bodily  violence,  although  there  may  be  some  indication 
of  it.  I  have  paid  my  last  premium  on  my  accident  policy 
and  I  hope  the  doors  are  open  so  that  anybody  to  whom 
this  subject  is  intolerable  may  escape.  In  September, 
four  years  ago,  in  presenting  my  views  in  favor  of  the  sub- 
mission of  a  value,  reduced  by  mathematical  process  of 
principal  and  interest  on  bond  investments,  I  felt  it  my 
duty,  although  I  never  urged  upon  anybody  else  to  do  it, 
to  put  it  in  full  operation  in  our  institution.  The  only 
suggestion  I  made  was  what  we  caU  in  the  vernacular  a 
kick.  To  Superintendent  Kilburn  I  objected  to  stating 
any  earnings  of  our  bank  without  regard  to  providing  for 
the  premiums  on  the  bond.  I  said  that  I  could  not  swear 
to  it  in  that  case,  and  I  made  a  statement  bringing  down 
the  balance,  which  was  only  perfunctory  and  was  not  a 
true  balance,  deducting,  however,  our  amortization. 

The  first  objection,  which  I  can  hardly  consider  an  ob- 
jection, is  the  amount  of  labor  required  to  make  the  com- 
putation. Knowing  Savings  Bank  officers  of  the  State 
as  well  as  I  do,  knowing  their  eagerness  for  work  and  their 
desire  to  be  busy  and  to  pass  away  the  hours  in  their 
sanctums,  and  knowing  what  slaves  to  duty  they  arc,  I 
think  it  is  rather  an  argument  in  favor  than  against  the 

*  Amortization  (Fr.  Law),  the  right  or  act  of  transferring  lands  in  mortmain* 
to  a  coq)oration. 

*Mortmain  (Fr)  mort,  dead,  main-hand,  a  condition  of  property  in  which 
it  is  held  without  the  power  of  change  or  alienation,  or  as  it  were  in  dead  hands: 
a  term  originally  applied  to  the  possession  of  land  by  ecclesiastical  bodies,  the 
members  of  which  (being  professed)  were  reckoned  dead  persons  in  law:  an 
inalienable  possession. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    407 

practice  of  computing  investment  values.  I  think  it  is  a 
labor  of  love  to  most  of  you.  We  can  leave  that  objection 
to  take  care  of  itself. 

There  are  one  or  two  other  objections  which  relate  to 
delusions  or  misconceptions  of  the  subject.  The  first  one 
of  these  that  I  will  take  up  is  the  superstitious  reverence 
for  the  par  value.  What  is  the  par  value?  That  has  a 
very  different  meaning  in  different  connections.  The  par 
value  of  stocks  is  a  mere  fiction.  The  par  value  of  a  stock 
does  not  at  all  show  the  actual  value.  We  could  all  get 
very  rich  if  par  values  were  the  real  value.  We  could 
within  a  few  blocks  of  here  buy  mining  stocks  for  a  few 
cents  a  share,  we  could  all  lose  money  by  selling  Chemical 
Bank  stock  at  par.  The  Hon.  Edward  M.  Shepard  took 
the  position  that  par  values  should  be  done  away  with, 
but  that  the  shares  should  state  that  they  bore  the  pro- 
portion of  one  millionth  or  one  thousandth  of  the  whole 
assets  of  the  institution.  I  would  not  go  as  far  as  that, 
but  the  par  value  in  the  case  of  stocks  is  an  absurdity. 
Some  years  ago  there  was  a  discussion  as  to  what  was  the 
par  value  of  our  surplus  by  gentlemen  in  this  State,  and  it 
has  cost  a  great  deal  of  expensive  litigation  to  find  out 
what  that  was.  I  don't  think  we  have  found  it  out  yet. 
Some  of  these  mathematicians  can  find  out  the  par  value 
of  an  Adirondack  forest  where  they  have  dammed  up  the 
streams  as  they  have  already  dammed  the  banks.  But  the 
par  value  of  a  bond  is  something  more  substantial.  It  is 
the  principal  sum  which  will  be  paid  at  maturity.  Why 
don't  we  call  it  principal?  It  is  the  principal  and  that  is 
all.  A  principal  sum  means  the  chief  sum,  and  it  is  a  fact 
that  every  bond  that  we  buy  covenants  not  merely  for 
the  payment  of  a  principal  sum  at  some  future  date,  but 
for  the  payment  of  a  number  of  minor  sums  which,  while 
none  of  them  equals  that  of  the  principal  sum,  probably 
in  the  aggregate  they  far  exceed  it,  and  the  gentlemen  who 
talk  of  par  values  as  being  the  real  value  must  ignore  the 
greater  part  of  the  value  of  the  bond.  For  example,  let 
us  take  a  six  per  cent,  thousand-dollar  fifty-year  bond 


4o8  HISTORY  OF  THE  SAVINGS  BANKS 

which  is  a  promise  not  only  to  pay  $i,ooo  at  the  end  of 
fifty  years,  but  to  make  one  hundred  payments  of  $30  each. 
That  means  $3,000.  You  should  not  ignore  the  $3,000. 
That  you  are  going  to  get  in  periodical  payments  every 
half  year.  You  should  take  into  consideration  the  $1,000 
payable  at  the  end.  I  say  that  the  $1,000  is  not  worth 
$1,000,  because  a  thousand  dollars  payable  in  one  year  or 
several  years  from  now  is  not  worth  a  thousand  dollars. 
This  Government  can  make  a  bond  worth  par  when  in  fact 
it  is  worth  much  less.  I  have  made  a  few  figures  here  show- 
ing a  six  per  cent,  bond  having  two  years  to  run.  To  start 
with  a  simple  proposition,  that  may  be  considered  as  five 
promissory  notes,  one  for  $1,000  due  two  years  from  now; 
another  $30  due  in  six  months;  another  of  $30  due  in  a 
year;  another  in  a  year  and  a  half,  and  another  at  the  same 
time  as  the  principal  of  the  bond.  If  you  buy  that  bond  on 
the  sk  per  cent,  basis  you  pay  exactl}'  par.  I  admit  that. 
But  not  for  the  reason  that  you  may  argue.  The  reason 
why  that  bond  is  worth  just  $1,000  now  is  the  fact  that 
present  values  of  those  five  items  will  amount  to  that. 
The  thousand  dollars  itself  is  $888.49.  You  are  not  going 
to  ignore  the  interest  upon  the  thirty-dollar  payments. 
You  deposit  those  in  the  same  bank.  The  $30  is  principal 
invested  and  has  earned  interest  upon  it.  But  you  cannot 
distinguish  principal  and  interest  in  current  accounts. 
In  our  deposit  account  a  man  comes  in  and  asks:  "How 
much  on  this  book  is  principal  and  how  much  is  interest?  " 
Perhaps  he  has  drawn  $10  at  one  time  and  at  another  $23, 
and  then  he  has  his  interest  written  up.  You  say:  *'We 
don't  know  whether  in  drawing  this  $10  you  drew  it  out 
of  principal  or  the  interest,  and  we  don't  care;  it  is  all 
principal  with  us."  The  value  of  this  $30  or  the  net  value 
of  the  $30  discounted  at  six  per  cent,  for  six  months  is 
$29.13.  The  value  of  the  next  $30  item,  ascertained  by 
reference  to  any  reliable  book  of  tables,  is  $27.45,  and  the 
last  one  is  worth  still  less,  $26.65.  I^  anybody  who  is 
expert  at  adding  wiU  add  those  across  he  will  find  the  rea- 
son why  that  bond  is  worth  a  thousand  doUars  is  not  be- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   409 

cause  that  is  the  principal  sum,  payable  two  years  from 
now,  but  because  of  the  value  of  those  five  items.  You 
have  discounted  the  five  notes  and  that  is  why  the  par 
in  that  case  is  exactly  the  principal. 

Let  us  make  another  supposition  to  show  that  the  cal- 
culations in  these  books  are  correct.  Let  us  discount  this 
bond  at  four  per  cent.  We  will  say  that  it  is  two  per  cent, 
semi-annually.  We  know  the  principal  of  true  discount; 
it  is  not  the  bank  discount.  If  it  is  at  four  per  cent.,  in 
order  to  earn  four  per  cent,  at  maturity  you  have  to  pay 
$29.41  for  that  one  (indicating)  instead  of  $29.13;  for 
the  next  one  $28.84;  for  the  next  one  you  have  got  to  pay 
$28.27,  ^^d  for  the  final  one  $27.72.  For  the  principal 
you  have  to  pay  $922.85.  If  you  add  those  across  we  will 
find  they  do  not  amount  to  par.  The  present  values  of 
what  you  have  invested  in  five  different  securities  of  five 
different  future  sums  receivable  is  $1,038.09,  and  that  is 
really  a  cent  too  much.  If  you  had  bought  them  accord- 
ing to  the  tables  they  would  have  cost  $1,038.08.  There 
are  a  few  mills  of  which  the  majority  of  them  falls  short. 
That  is  not  really  quite  84  cents  and  that  is  not  quite  27; 
consequently  there  is  an  apparent  error  there  which  will 
rectify  itself  in  the  long  run  of  one  cent.  Let  us  consider 
what  happens  in  these  two  years  during  which  you  hold 
these  bonds.  You  are  entitled  to  get  four  per  cent,  a  year, 
payable  semi-annually.  Here  are  five  sums.  On  the 
first  one  you  are  entitled  to  get  58  cents;  for  the  second 
you  are  entitled  to  get  58  cents,  and  for  the  third  57  cents, 
and  for  the  fourth  55  cents.  On  the  large  one  it  will  be 
$10.48.  Now  we  will  find  how  we  stand  at  the  end  of  the 
half  year.  The  first  one  amounts  to  exactly  thirty  dollars, 
and  that  is  what  you  get.  We  will  call  that  off.  Your 
second  payment  is  worth  $29.42,  and  your  third  one  is 
$28.34,  and  the  fourth  is  worth  $28.27,  and  the  principal 
sum  not  worth  a  thousand  dollars  but  $932.43.  The 
amount  now  invested  is  $1 ,028.86.  One  of  these  five  notes 
which  you  discounted,  on  which  you  have  received  three 
per  cent,  for  the  half  year,  has  been  paid,  and  that  is  out  of 


4IO  HISTORY  OF  THE  SAVINGS  BANKS 

the  question.  The  next  one  on  the  next  half  year  you 
ought  to  get  59,  but  as  a  matter  of  fact  you  only  get  58 
cents  on  account  of  this  Httle  preference;  that  84  was  not 
quite  84.  Consequently,  in  the  course  of  time,  you  lost 
that  cent.  This  one  becomes  $30,  is  paid  off,  and  elimi- 
nated. Again  here  we  have  the  figures  58  and  57.  We  will 
make  an  inventory  of  what  we  have.  We  have  only  three 
items  added  together.  The  first  one  comes  to  $30  and  is 
paid;  the  next  one  amounts  to  $29.42,  and  one  more  opera- 
tion of  the  same  kind  will  finish  it — we  have  a  thousand 
dollars  and  one  cent.  We  have  reduced  that  to  par  at 
maturity.  The  principal  of  a  bond  payable  in  the  future 
is  not  worth  par.  In  computing  values  of  bonds  you  have 
to  take  into  consideration  interest  payments  as  much  as 
the  final  principal  payment;  and,  lastly,  that  in  no  other 
way,  as  our  superintendent  pointed  out,  can  you  exactly 
ascertain  your  earnings  and  the  amount  which,  conse- 
quently, you  are  at  liberty  to  divide  among  your  deposi- 
tors. 

There  is  one  other  of  these  mistaken  ideas.  It  is  hard 
to  think  that  a  bond  below  par  operates  on  the  same  prin- 
cipal as  a  bond  above  par.  Everybody  will  admit  when  a 
bond  bears  a  premium  there  is  a  small  reduction  of  the 
interest.  If  you  pay  104  where  the  principal  sum  is  only 
a  thousand  doUars  you  are  lowering  whatever  the  nominal 
interest  is  to  a  lower  figure.  Nobody  would  say  that  be- 
cause a  bond  is  so  good,  because  the  railroad  is  so  fine, 
because  they  carry  so  many  passengers,  and  because  it  has 
such  splendid  earnings,  that  that  would  make  a  thousand- 
dollar  bond  worth  $1,040.  There  was  never  a  road  so 
good  that  its  mere  goodness  would  raise  the  value  of  its 
bonds.  There  is  also  an  idea  that  there  may  be  a  depre- 
ciation in  a  bond  which  is  not  due  to  raising  the  interest 
rate.  That  I  think  a  delusion.  I  think  that  a  bond  se- 
cured by  certain  mortgages  cannot  be  reduced  except  so 
far  as  that  reduction  raises  the  interest.  The  reason  for 
that  is  this :  every  payment  of  interest  is  for  the  use  of  the 
money,  the  bare  use  of  the  money,  and  nothing  else.     The 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   411 

Government  of  the  United  States  gets  its  money  even 
below  the  riskless  rate,  but  on  every  other  security  of  any 
kind  we  not  only  pay  the  current  rate,  caused  by  the  law 
of  demand  and  supply  for  the  use  of  money — the  use  that 
can  be  made  out  of  it  by  the  other  man  who  borrows  it — 
but  we  pay  an  insurance  premium  against  risks.  That  is 
not  the  risk  of  not  being  able  to  coUect  the  money  at  all; 
it  is  the  risk  of  having  to  wait  for  it,  the  risk  of  being  tied 
up  in  legal  proceedings,  the  risk  of  delay  and  being  obliged 
to  institute  court  proceedings,  the  risk  of  many  things, 
and  these  are  insured  against  by  part  of  the  interest. 
Every  interest  payment  consists  in  part  of  an  insurance 
premium.  The  State  of  New  York  has  absolute  credit, 
but  it  has  been  unable  to  borrow  on  its  new  canal  bonds 
at  three  per  cent.  Therefore  we  can  pretty  easily  say 
that  three  per  cent,  represents  interest  without  risk.  The 
plain  interest  eliminated,  it  is  a  question  of  risk  and  trouble. 

Let  us  suppose  a  railroad  bond  that  we  bought  ten  years 
ago  at  95  with  twenty  years  to  run  at  that  time  and  now 
has  ten  years  to  run.  Owing  to  the  bad  management  of 
the  road  and  other  causes,  a  good  many  of  them,  that 
bond  has  depreciated.  Is  it  the  bad  management  of  the 
road  that  has  depreciated  the  bond?  I  say  no.  I  say 
it  is  the  bad  management  of  the  road  which  has  caused 
the  higher  insurance  premium  to  be  paid  by  the  purchaser 
against  this  risk  and  trouble  of  delay  and  possible  loss. 

Mr.  Coombs:  Does  it  not  amount  to  the  same  thing 
after  all? 

Mr.  Sprague:  Not  quite.  I  don't  think  so  and  I  will 
show  you  why.  Suppose  we  paid  80  for  that  bond;  that 
is  a  six  and  three  eighths  basis.  In  round  numbers  there 
is  $80,000  on  $100,000  bond.  That  does  not  affect  the 
purchaser  of  the  bond  unless  the  bond  is  not  going  to  be 
paid  at  maturity.  The  rate  of  80  means  that  if  the  rail- 
road had  to  borrow  again  on  a  four  per  cent,  bond  it 
could  only  sell  at  80.  Suppose  the  railroad  had  some 
bonds  unissued  in  its  treasury  and  had  the  right  to  vary 
the  percentage  on  those.     If  the  badness  of  the  road 


412  HISTORY  OF  THE  SAVINGS  BANKS 

directly  affects  the  value  of  the  bond,  without  regard  to 
the  interest,  then  it  ought  to  affect  these  bonds  which 
could  never  sell  at  par.  Suppose  a  man  comes  in  with 
$80,000  and  he  says:  "I  am  going  to  buy  a  hundred  thou- 
sand dollars'  worth  of  your  bonds  at  80  on  which  they  will 
pay  me  six  and  one  half  per  cent.,"  and  you  say:  "You 
have  some  on  w^hich  the  interest  may  be  fixed  by  us  at 
discretion,"  the  six  and  one  half  per  cent,  bond  would  not 
be  shaded  below  par  by  the  effect  of  the  badness  of  the 
road.  A  few  years  ago,  when  these  were  at  95  on  a  four 
and  three  eighths  basis,  probably  the  insurance  risk  in- 
cluded in  the  interest  was  two  and  three  eighths.  The 
road  has  got  so  bad  now  that  it  pays  six  and  one  half  per 
cent.,  and  it  pays  three  and  one  half  per  cent,  for  insur- 
ance. And  that  is  all  there  is  of  it.  The  management 
of  the  road  and  its  run-down  condition  are  not  sufficient  to 
prejudice  the  probability  of  your  getting  your  money 
in  full  and  getting  it  without  trouble  and  litigation.  That 
will  not  affect  the  price  of  the  bond,  but  it  will  affect  it 
through  this  case  upon  the  rate  of  interest,  upon  that  part 
of  the  rate  of  interest  which  is  included  in  the  heading 
"Insurance  premiums  against  risk." 

VIEWS    AS    TO    BANK    ADVERTISING 

Mr.  Franklin  of  the  Queens  County  Savings  Bank: 

Mr.  Franklin:  I  desire  to  call  to  the  attention  of  this 
meeting  a  matter  which  was  touched  upon  last  year  and 
as  it  seems  to  me  is  worthy  of  at  least  an  expression  of 
opinion  from  this  Association,  and  that  is  the  practice 
indulged  in  by  some  of  the  largest  banks  and  which  I  fear 
is  spreading,  of  soliciting,  by  advertisement  or  otherwise, 
deposits  from  within  territory  occupied  by  another  insti- 
tution. 

The  bank  which  I  represent  is  situated  in  the  old  village 
of  Flushing,  now  a  part  of  this  great  city,  and  I  hold  in  my 
hand  a  copy  of  an  advertisement  which  has  appeared  for 
the  past  few  weeks  in  both  of  our  daily  papers,  calling 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    413 

attention  to  the  great  strength  of  a  savings  institution  in 
the  Borough  of  Brooklyn  and  soHciting  deposits  by  mail, 
thus  seeking  to  divert  funds  which  naturally  would  come 
to  the  Queens  County  Savings  Banks. 

Now  while  I  do  not  believe  such  action  is  contrary  to 
the  letter  of  the  law,  I  do  most  emphatically  assert  that  it 
is  contrary  to  its  spirit,  for,  if  I  read  the  statute  correctly, 
the  Legislature  intended  that  a  Savings  Bank  should  have 
exclusive  control  of  the  territory  in  which  the  bank  is 
situated,  and  as  conditions  change  as  to  density  of  popu- 
lation, etc.,  the  law  expressly  provides  that  the  Superin- 
tendent of  the  Banking  Department  shall,  if  another  bank 
wishes  to  enter  said  territory,  decide  whether,  in  his  good 
judgment,  it  is  desirable  to  give  permission  for  it  to  do  so. 
I  certainly  consider,  Mr.  Chairman,  that  such  a  course  of 
action  on  the  part  of  any  savings  institution  is  unjust  to 
the  smaller  banks  and  unwise  to  those  who  participate 
therein,  for  if  this  mad  rush  for  supremacy  or  personal 
aggrandizement  continues,  it  will,  in  my  opinion,  eventually 
result  in  disaster;  and  in  order  to  bring  the  matter  regu- 
larly before  the  meeting,  I  beg  leave  to  offer  the  following 
resolution : 

Resolved:  That  in  the  opinion  of  this  Association,  the 
practice  indulged  in  by  some  of  our  larger  institutions,  of 
soliciting  deposits  within  the  territory  occupied  by  another 
Savings  Bank,  is  unwise  and  not  conducive  to  the  best 
interest  of  savings  institutions. 

This  was  referred  to  the  Executive  Committee  for  report 
at  the  next  meeting. 


Note:  Mortgage  Tax  Law  became  operative  July  i, 
1905;  it  was  superseded  July  i,  1906,  by  the  Mortgage 
Recording  Law. 


CHAPTER  XV 

Fifteenth  Annual  Convention — Retirement  of  President  Van 
Rensselaer  and  Secretary  Conklin — Address  of  Bank  Super- 
intendent Clark  Williams — Resolution  of  Mr.  Charles  A; 
Miller  Relative  to  the  Finances  of  the  City  of  New  York — 
Election  of  Mr.  Chas.  A.  Miller,  as  President — Addresses  by 
Andrew  Mills,  John,  Harsen  Rhoades,  Son  of  the  Former 
President,  and  Chas.  E.  Hanaman — Amortization  of  Bond 
Investments. 

THE  Fifteenth  Annual  Convention,  which  was  held 
in  the  City  of  New  York  on  May  14,  1908,  marked 
the  retirement  from  the  Presidency  of  Mr.  William 
B.  Van  Rensselaer,  who  had  served  for  four  years  most 
acceptably  in  that  capacity.  The  Association  also  lost 
the  further  services  of  its  veteran  and  efficient  Secretary, 
Mr.  Wm.  G.  Conklin,  both  having  positively  declined 
to  permit  the  further  use  of  their  names  in  connection  with 
the  offices  named. 

THE   president's   ADDRESS 

In  his  opening  address,  President  Van  Rensselaer  said: 

It  gives  me  great  pleasure  to  welcome  you  all  to  our 
fifteenth  annual  meeting.  I  desire  to  assure  you  that  our 
Association  was  never  stronger  than  it  is  at  the  present 
time.  We  are  recognized  as  an  important  factor  in 
Savings  Bank  matters,  not  only  by  the  Banking  Depart- 
ment, but  also  by  the  strongest  and  best  men  in  the 
Legislature  of  the  State.  They  know  the  position  this 
Association  takes  is  what  we  honestly  believe  to  be  for  the 
best  interests  of  our  depositors,  and  the  Legislative  Com- 

414 


HISTORY  OF  THE  SAVINGS  BANKS  ASSOCIATION  415 

mittee  on  Banks  is  ready  to  trust  us  as  experts  and  to 
cooperate  with  us.  As  long  as  these  committees  are 
composed  of  the  same  class  of  men  that  now  serve,  the 
Savings  Banks  need  not  worry  about  hostile  or  unsound 
laws. 

In  his  recent  report  to  the  Legislature,  the  Superinten- 
dent of  Banks  says  that  during  the  year  1907  the  with- 
drawals from  the  one  hundred  and  thirty-eight  Savings 
Banks  of  the  State  exceeded  the  deposits  by  nearly  thirty- 
two  milUons,  but  that  the  dividends  credited  increased 
the  amount  due  depositors  about  eighteen  and  a  half 
millions. 

Notwithstanding  the  excessive  withdrawals  there  was  a 
gain  in  open  accounts  of  45,638,  bringing  the  total  number 
on  January  i,  1908,  to  2,731,477. 

The  question  occurs  to  me  whether  or  not  it  would  be 
feasible  or  desirable  to  require  a  notice  on  every  withdrawal. 
This  thought  was  suggested  by  a  visit  to  the  Philadelphia 
Saving  Fund  Society,  incorporated  in  February,  1819, 
which  on  the  first  of  January  last  had  265,206  open  ac- 
counts, considerably  more  than  any  Savings  Bank  in  this 
State. 

This  Society  has,  and  strictly  enforces,  the  following 
by-law:  "Deposits  and  interest  thereon  will  be  repaid  after 
two  weeks'  notice  (interest  ceasing  when  notice  is  given). 
The  Society  may,  however,  exercise  the  right  under  its 
charter,  when  deemed  advisable,  to  limit  the  amount 
payable,  after  two  weeks'  notice,  to  sums  not  exceeding 
One  Hundred  Dollars;  when  more  than  One  Hundred 
Dollars  shall  be  demanded  within  any  period  of  sixty  days 
the  Society  may  at  any  time  require  sixty  days'  previous 
notice  before  paying  more  than  the  said  One  Hundred 
Dollars." 

During  the  year  1907  the  Society  had  420,000  deposits 
and  182,000  withdrawals,  and  the  deposits  exceeded  the 
withdrawals  by  $645,176.29  (interest  credits  not  included). 
The  New  York  State  Savings  Banks  lost  $3 1 ,608,897. 7  5  dur- 
ing that  period.     In  the  year  1893,  when  the  withdrawals 


41 6  HISTORY  OF  THE  SAVINGS  BANKS 

exceeded  the  deposits  in  the  New  York  State  Savings 
Banks,  this  Society  gained. 

During  the  past  thirty  years  (I  have  no  available  figures 
beyond  that  period)  the  deposits  exceeded  the  withdrawals 
each  year,  and  the  Society  increased  steadily  its  contingent 
fund,  which  we  foolishly  call  "Surplus,"  from  one  million 
to  over  eight  million  dollars. 

While  the  New  York  laws  allow  us  to  pass  by-laws  to 
repay  deposits  after  such  previous  notice  as  the  trustees 
shall  prescribe,  and  while  we  all  have  such  by-laws,  it  is 
customary  to  waive  any  notice  except  in  rare  cases;  and 
when  the  right  is  exercised  we  do  it  reluctantly  and  con- 
sider it  a  weakness  to  be  compelled  to  do  it  at  all.  If 
notice  was  universally  required  it  might  effectually  pre- 
vent danger  of  a  run  and  our  customers  would  soon 
become  used  to  it  and  think  nothing  about  it.  My  mind 
is  open  to  conviction  on  both  these  topics.  I  believe  the 
time  has  come  when  they  should  be  discussed  and  thrashed 
out,  and  this  Association  should  decide  what  position 
its  Executive  Committee  should  take  and  the  reasons 
therefor. 

My  attention  has  been  called  to  the  facts  that  the 
Savings  Banks  of  this  State  have  invested  $150,000,000 
in  the  bonds  of  the  City  of  New  York,  and  that  the  ac- 
counts and  methods  of  the  Department  of  Finance  of  the 
city  are  now  kept  in  an  antiquated  and  chaotic  manner. 
It  is  of  great  importance  to  the  Savings  Banks  that  the 
municipal  finance  of  all  the  cities,  in  whose  bonds  we 
may  invest,  should  be  placed  and  maintained  upon  a 
sound  business  basis. 

These  reforms  in  the  finances  of  New  York  City  will 
not  be  brought  about,  it  is  feared,  without  a  strong  ex- 
pression of  public  sentiment  and  the  emphatic  demands 
of  those  institutions  which  should  know  the  exact  state 
of  affairs. 

I  have  had  the  great  honor  of  holding  the  oflftce  of 
President  of  this  Association  for  four  years.  Let  me  say 
that  I  consider  the  work  done  in  connection  with  it  as  part 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   417 

of  the  most  interesting  of  my  business  life.  It  is  a  very 
real  regret  to  me  that  it  is  over,  but  the  time  has  come  for 
some  one  else  to  assume  the  honors  and  responsibilities 
of  the  position.  I  have,  therefore,  requested  the  Com- 
mittee not  to  renominate  me. 

As  the  ex-Presidents  of  the  Association  are  by  our  Con- 
stitution ex-officio  members  of  the  Executive  Committee, 
I  shall  hope  to  continue  to  render  what  services  I  may  for 
some  time  to  come. 

In  retiring  from  the  Presidency  of  your  body,  I  desire 
to  thank  you  for  your  ready  assistance,  whenever  I  have 
needed  it,  and  for  your  untiring  kindness  and  Consideration. 

REPORT   OF   THE   EXECUTIVE   COMMITTEE 

The  report  of  the  Executive  Committee  was  read  by 
Mr.  Miller  of  Utica. 

The  Executive  Committee  met  on  October  11, 1907,  and 
organized  by  reelecting  the  chairman,  secretary,  and 
counsel.  The  propriety  of  calling  a  meeting  of  the  presi- 
dents of  the  various  banks  in  the  City  of  New  York,  to 
consider  a  uniform  rate  of  dividends  of  three  and  one  half 
per  cent.,  was  discussed.  As  it  was  the  opinion  of  the 
majority  that  such  a  meeting  was,  at  that  time,  inexpedi- 
ent, that  matter  was  dropped  without  formal  action. 

The  soliciting  of  deposits  by  larger  institutions  within 
the  territory  occupied  by  other  Savings  Banks,  which  was 
referred  to  the  Executive  Committee,  was  considered,  and 
the  following  resolution  was  adopted: 

'^Resolved,  That  while  we  deprecate  any  undue  competi- 
tion between  institutions  that  should  all  serve  the  public 
unselfishly,  the  proposition  referred  to  in  the  resolution 
can  only  be  regulated  by  the  good  sense  of  the  officers  of 
the  various  banks  and  cannot  properly  be  restricted  by 
this  Association." 

On  November  20,  1907,  the  Executive  Committee 
met  to  consider  the  effect  of  the  panic  upon  the  Savings 
Banks.     Committees   consisting   of  Messrs.   Mills,   Eel- 


4i8  HISTORY  OF  THE  SAVINGS  BANKS 

singer,  and  Multy  for  New  York  County,  and  Messrs. 
Meserole,  Schieren,  and  Coombs  for  Kings  County,  were 
appointed  to  take  such  steps  as  might  be  desirable  to 
strengthen  the  position  of  the  banks  in  each  county. 

During  the  winter  the  Executive  Committee  was  con- 
sulted in  writing  as  to  its  attitude  toward  the  amendments 
to  sections  20  and  123  of  the  banking  law,  which  provide 
for  some  form  of  amortization  of  securities,  and  the  bills 
introduced  by  Messrs.  Saxe  and  Bennett  restricting  the 
trustees  in  a  Savings  Bank  who  may  be  directors  of  any 
other  single  financial  institution  to  one  third  of  the  total 
number,  and  providing  that  no  officer  of  a  financial  in- 
stitution in  which  a  Savings  Bank  deposits  any  fund  may 
be  a  trustee  in  such  Savings  Bank.  Each  member  of  the 
Committee  expressed  his  views  on  these  measures.  By 
substantial  majoritiesthe  Committees  decided  to  favor  the 
first  two  measures  and  to  oppose  the  others.  In  like 
manner  the  Committee  decided  to  oppose  the  bills  of 
Senator  Davies  and  Mr.  O'Brien  which  amended  the  in- 
vestment law  by  legalizing  the  bonds  of  steamship  com- 
panies plying  on  the  Great  Lakes. 

The  Committee  met  again  on  April  10, 1908,  and  elected 
Mr.  Conklin  of  the  Franklin  Savings  Bank  to  fill  the  va- 
cancy on  the  Committee  caused  by  the  death  of  Mr.  W. 
H.  S.  Wood. 

The  session  of  the  Legislature  for  1908  was  very  prolific 
of  changes  in  the  banking  law,  and  the  Savings  Banks  did 
not  altogether  escape  attention.  Altogether,  the  officers 
of  the  Committee  received  and  examined  carefully  two 
hundred  and  six  bills  which  affected  banking  interests, 
and,  of  these,  found  thirty-seven  which  directly  interested 
the  Savings  Banks.  These  ranged  in  importance  from  the 
bills  introduced  by  the  Committees  on  Banks  with  the 
approval  of  the  Superintendent,  which  amended  sections 
20  and  123  of  the  banking  law  as  to  amortization;  author- 
ized banks  to  borrow  money  and  give  collateral,  with  the 
consent  of  the  Superintendent;  required  trustees  to  take 
an  oath  of  office  and  made  the  officers  responsible  for 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   419 

presenting  to  the  trustees,  monthly,  a  detailed  report  of 
loans  and  investments;  to  bills  like  that  of  A.  E.  Smith, 
requiring  an  annual  election  of  trustees  by  the  depositors 
and  making  trustees  ineligible  for  reelection. 

A  hearing  was  held  on  March  3d,  before  the  joint  Com- 
mittees on  Banks  of  the  Senate  and  Assembly,  at  which  the 
Committee  opposed  the  following  bills:  Admitting  New 
York  City  tax  liens  to  the  investment  list;  admitting 
steamship  bonds  to  the  list  of  legal  investments ;  restricting 
the  number  of  trustees  who  may  be  directors  in  other 
financial  institutions  to  one  third;  repealing  Chapter  42 
of  the  Laws  of  1900,  pensioning  officers  and  employees 
after  twenty-five  years  of  service;  requiring  dividends  to 
be  paid  quarterly;  providing  for  the  insuring  of  Savings 
Bank  deposits;  requiring  the  payment  of  interest  to  de- 
positors for  the  full  time  their  money  remains  on  deposit. 
We  believe  that  no  bill  which  we  opposed  became  a  law. 

REMARKS   OF  MR.    CLARK  WILLIAMS 

It  is  a  great  pleasure  for  me  to  be  with  you  to-day  and 
to  meet  you  personally.  I  feel  sure  that  the  business  of 
your  Association  will  preclude  a  lengthy  discussion  of 
matters  which  of  late  have  been  on  the  minds  and  hearts 
of  those  interested  in  banking  in  this  State.  I  welcome 
the  opportunity,  however,  of  being  with  you.  Six  months 
ago  I  knew  very  little  about  Savings  Banks,  and  I  daresay 
there  are  those  who  perhaps  do  not  approve  the  legislation 
recently  enacted  who  will  think  that  the  condition  of  mind 
of  the  Superintendent  of  Banks  has  not  since  materially 
changed.  There  are  several  things,  however,  gentlemen, 
that  I  do  know.  I  have  learned  to  respect  the  Savings 
Bank  of  the  State  of  New  York  as  an  institution  of  the 
highest  class.  I  doubt  if  in  this  world  there  is  a  type  of 
financial  institution  which  better  serves  its  purpose,  which 
is  safer,  and  answers  more  adequately  the  needs  of  the 
people  who  are  properly  its  patrons.  This  condition  may 
be  attributed  by  some  to  the  laws  upon  our  statute  books. 
I  go  further  than  that,  however,  and  attribute  it  to  the 


420  HISTORY  OF  THE  SAVINGS  BANKS 

character  of  the  men  who  have  the  management  of  these 
institutions  in  their  care.  That  management,  in  my 
judgment,  is  characterized  by  an  unselfish  adherence  to 
the  principles  upon  which  these  philanthropic  institutions 
are  founded.  The  ambition  of  the  Savings  Bank  Presi- 
dent is  for  the  safety  of  his  institution  and  the  proper  care 
of  the  moneys  of  the  provident  poor,  rather  than  a  personal 
ambition  to  become  himself  wealthy. 

There  is  a  matter  to  which  I  suggest  you  should  give 
proper  consideration,  and  that  is  the  encroachment  upon 
your  legitimate  field  on  the  part  of  other  institutions, 
some  financial,  some  mercantile,  some  State  institutions, 
and  Federal  institutions  as  well. 

It  is  a  personal  satisfaction  at  this  time  to  express 
publicly  my  appreciation  of  the  efforts  of  your  Committee 
upon  Legislation.  The  work  of  your  honored  President, 
of  Mr.  Miller,  and  of  Mr.  Mills,  was  of  inestimable  value 
not  only  in  securing  the  legislation  which  we  believe  will 
be  of  great  benefit  to  your  system  in  the  future,  but  quite 
as  much  in  the  prevention  of  the  passage  of  measures 
which  were  improper. 

I  wish  you  to  know  that  it  is  the  purpose  of  the  Banking 
Department  to  be  characterized  by  responsive,  efficient 
administration.  This  is  what  we  wish,  and  we  ask  your 
cooperation.  We  feel  that  without  this  cooperation  this 
efficiency  cannot  be  maintained.  We  wish  you  also  to 
know  that  we  propose  to  be  helpful  to  the  greatest  possible 
degree,  and  shall  welcome  at  all  times  the  opportunity  of 
being  of  service. 

FINANCES   OF   THE   CITY   OF   NEW   YORK 

Mr.  Charles  A.  Miller:  Mr.  Chairman,  if  it  is  in  order 
under  the  head  of  new  business,  I  wish  to  present  and  move 
the  adoption  of  what  would  be  a  suitable  resolution  in 
regard  to  the  finances  of  the  City  of  New  York,  in  response 
to  the  request  of  the  Association,  which  has  been  commu- 
nicated in  writing,  I  think,  to  every  member  here,  and 
which  communication  has  explained  the  necessity  and 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   421 

desirability   of   more   efficient   accounting   methods.     I 
therefore  move  the  following: 

RESOLUTION   OF   CHAS.    A.    MILLER 

Whereas,  The  Savings  Banks  of  New  York  State  own 
approximately  $150,000,000  of  New  York  City  bonds,  and 

Whereas,  The  3,000,000  depositors  in  these  Savings 
Banks  have  an  important  interest  in  the  legality  and 
market  price  of  municipal  holdings,  and 

Whereas,  Both  the  legality  and  the  value  of  municipal 
bonds  may  be  affected  by  the  methods  of  administration 
which  fail  to  give  accurate  information  as  to  the  amount 
of  indebtedness,  and  which  do  not  protect  against  waste- 
ful expenditure  and  inadequate  accounting  for  revenue, 
and 

Whereas,  The  Comptroller  of  the  City  of  New  York  has 
given  publicity  to  a  report  by  the  Bureau  of  Municipal 
Research,  which  shows  that  New  York  City  is  not  able 
at  present  to  determine  the  amount  of  its  liabilities,  to 
determine  the  propriety  of  expenditures  on  claims  pre- 
sented for  payment,  to  audit  its  revenues,  or  protect  itself 
against  infidelity  or  incompetence  of  officers  and  employees, 
and 

Whereas,  The  Comptroller  of  New  York  City  has  adopted 
the  plan  submitted  by  the  Bureau  of  Municipal  Research 
after  approval  by  three  leading  accounting  firms  pro- 
viding for  reorganizing  the  financial  methods  of  New 
York  City  so  as  to  apply  principles  of  business  adminis- 
tration, be  it 

Resolved,  That  the  Savings  Banks  Association  of  the 
State  of  New  York  express  to  Comptroller  Metz  the  belief 
that  the  immediate  reorganization  of  New  York  City's 
Department  of  Finance  is  of  the  utmost  consequence  to 
the  depositors  in  Savings  Banks,  and  that  no  consideration 
should  be  permitted  to  obstruct  the  execution  of  plans 
for  such  reorganization,  and  be  it  further 

Resolved,  That  while  not  committing  itself  to  details  of 
any  particular  accounting  method,  the  Savings  Banks 


422  HISTORY  OF  THE  SAVINGS  BANKS 

Association  submits  as  the  minimum  requirements   of 
adequate  financial  control  that 

(i)  Responsibility  be  fixed  for  every  financial  trans- 
action. 

(2)  A  basis  be  provided  for  the  prompt  and  intelligent 
audit  of  claims  for  goods  furnished  and  work  performed. 

(3)  A  method  be  installed  for  proving  the  accuracy  of 
collections,  not  only  by  cash  books,  but  by  reference  to 
evidence  of  moneys  due  and  moneys  actually  received. 

(4)  If  it  be  possible  for  investors  in  New  York  City^s 
bonds  to  know  the  total  liabilities  of  the  city,  as  a  means 
of  determining  the  value  and  legality  of  such  bonds  before 
purchase. 

Be  it  further  Resolved,  That  it  is  the  sense  of  this  Asso- 
ciation that,  in  effecting  such  reorganization  of  New  York 
City's  financial  methods,  Comptroller  Aletz  would  be  con- 
ferring a  lasting  benefit  not  only  upon  Savings  Bank  de- 
positors and  holders  of  municipal  bonds,  but  upon  all 
interested  in  the  more  efficient  administration  of  municipal 
government. 

ADDRESS   OF   WILLIAM   J.    COOMBS 

Mr.  President:  I  think  we  cannot  overestimate  the 
importance  of  the  action  contemplated  under  those  reso- 
lutions which  I  understand  have  the  sanction  of  Comp- 
troller Metz.  There  is  probably  not  a  Savings  Bank 
represented  in  this  gathering  that  is  not  a  holder  of  bonds 
of  the  city.  We  none  of  us  doubt  for  a  moment  that  they 
are  perfectly  safe  and  will  be  paid  at  maturity,  yet  we  are 
confronted  by  the  fact  that,  while  it  is  the  greatest  and 
richest  city  in  the  country,  their  market  value  is  very 
much  below  that  of  some  inferior  cities.  We  find  the 
bonds  of  some  of  the  eastern  cities  quoted  on  a  3.80  basis, 
while  those  of  this  great  city  are  held  upon,  approximately, 
a  4.20  interest-paying  basis.  This  is  doubtless  in  part 
due  to  the  very  large  issues  that  have  been  necessary  on 
account  of  the  enormous  expenditures  necessarily  in- 
curred in  the  improvements  called  for  by  the  various 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK  423 

boroughs,  all  of  which  add  to  our  security  as  bondholders, 
but  a  large  part  is  caused  by  our  defective  system  of  book- 
keeping and  accounting,  the  sursdval  of  old  methods  not 
adapted  to  the  new  conditions  since  the  time  of  consolida- 
tion. One  cause  of  confusion  is  doubtless  in  the  condem- 
nation of  property  for  public  uses.  The  Comptroller's 
ofhce  must  find  it  difficult  to  accurately  estimate  the 
amount  of  the  indebtedness  of  the  city  for  land  acquired, 
or  in  process  of  being  acquired.  The  following  is  an 
illustration  of  what  I  mean:  Our  Institution  has  two 
mortgages  on  property  acquired  by  the  city — through 
condemnation  proceedings.  In  both  cases  they  are  related 
to  improvements  decided  upon,  but  the  full  legal  details 
of  which  have  not  been  completed.  Nevertheless  the  city 
has  entered  upon  possession  and  exercised  the  right  of  full 
ownership,  such  as  removing  buildings,  and  in  one  case 
making  excavations,  leaving  us  practically  in  the  condition 
of  holding  a  mortgage  on  a  hole  in  the  ground.  We  are 
not  worried,  but  the  condition  is  peculiar.  If  the  resolu- 
tions do  not  specifically  cover  this  point  I  suggest  that  an 
amendment  be  added.  We  must  all  of  us  sympathize 
with  the  Comptroller,  who  is  a  good  business  man,  in  his 
efforts  to  inaugurate  a  new  system  of  bookkeeping  and 
accounting  that  will  enable  him  at  all  times  to  be  guided 
by  exact  information. 

The  General  Government  is,  I  venture  to  say,  a  model 
in  this  respect.  Under  all  administrations  the  system  in- 
augurated by  Alexander  Hamilton  has  proved  adequate 
to  meet  the  requirements  of  the  country,  notwithstanding 
its  enormous  expansion.  Although  many  efforts  to  change 
it  have  been  made,  they  are  essentially  the  same  as  that 
devised  by  that  great  statesman.  Under  its  operation 
the  Secretary  of  the  Treasury  is  able  on  the  first  of  every 
month  to  make  an  accurate  statement  of  the  resources  and 
obligations  of  the  Government.  If  our  Comptroller  was 
in  a  position  to  do  the  same  thing  it  would  simplify  his 
duties  and  add  greatly  to  the  market  value  of  our  city 
securities. 


424  HISTORY  OF  THE  SAVINGS  BANKS 

Mr.  E.  P.  Maynard:     Mr.  President,  may  I  say  a  word 

on  this  resolution? 

While  I  suppose  the  measures  advocated  in  this  resolu- 
tion are  necessary,  I  also  believe  we  want  to  be  very 
careful  in  adopting  the  resolution  because  of  the  possible 
effect  on  the  market  value  of  these  securities.  For  that 
reason  I  believe  that  in  the  resolution  should  be  incorpo- 
rated a  statement  to  the  effect  that  we  have  every  confi- 
dence in  the  ability  of  the  City  of  New  York  to  meet  its 
obligations  at  all  times,  but  that  we  do  believe  that  some 
change  should  be  made  in  the  method  of  accounting  in 
the  Comptroller's  office. 

The  resolutions  were  adopted. 

Mr.  John  T.  Smith,  Chairman  of  the  Nominating  Com- 
mittee said: 

As  our  very  worthy  and  efi&cient  President  and  Secre- 
tary have  declined  further  nominations  for  the  offices 
which  they  have  filled  so  effectively  as  to  merit  the 
gratitude  of  the  Association,  it  becomes  necessary  un- 
der these  conditions  for  the  Committee  on  Nominations 
to  look  for  some  one  else  to  fill  the  positions.  Our  minds 
would  naturally  turn  to  one  who  would  seem  to  be  a  logical 
candidate  for  President  under  the  situation,  a  man  who 
was  the  father  of  the  bill  for  standardizing  the  invest- 
ments of  Savings  Banks,  one  of  the  most  important  pieces 
of  legislation  which  have  passed  the  Legislature  in  relation 
to  banks.  It  not  only  fixed  a  standard  of  valuation,  but 
it  removed  that  constant  menace  of  speculators  making 
a  market  for  their  bonds  by  dumping  them  upon  the 
Savings  Banks.  He  is  a  man  of  keen,  good  judgment, 
who  has  been  the  champion  of  the  banks  in  all  matters 
before  the  Legislature  for  some  years  past,  and  who,  to 
my  own  experience,  is  one  of  the  most  effectual  advocates 
that  has  ever  come  before  the  Legislature. 

I  would  say  that  this  matter  was  submitted  to  Mr. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   425 

Miller  and  I  failed  to  get  his  consent,  but  I  believe  that  if 
it  comes  to  Mr.  Miller  by  the  request  of  this  Association 
he  would  have  to  accept, 

Mr.  Miller,  President-elect  on  assuming  the  chair,  said : 

I  do  not  think  any  one  can  regret  your  act  more  than  I 
do.  I  am  sure  no  one  could  feel  more  highly  honored  than 
I  feel  by  what  you  have  done.  I  can  only  say  to  you  that 
while  I  remain  your  President  I  will  do  the  very  utmost 
that  in  me  lies  to  follow  the  examples  which  have  been 
set  for  me  by  the  really  great  men  who  have  preceded  me 
in  this  ofhce.  The  most  that  I  can  promise  you  is  that 
it  will  be  my  greatest  effort  to  try  to  do  as  nearly  as  well 
as  those  Presidents  who  have  gone  before  me  as  my 
ability  will  permit,  and  to  follow  especially  my  last  pred- 
ecessor, whose  retirement  from  the  office  of  President 
I  believe  to  be  a  really  great  loss  to  this  Association.  I 
cannot  accept  the  office  without  expressing  my  very 
great  regret  that  in  taking  it  the  Association  is  losing 
the  services  of  Mr.  Van  Rensselaer,  who  has  done 
for  us  all  much  more,  I  think,  than  you  gentlemen 
who  have  not  been  closely  associated  with  him  can  ever 
know. 

Mr.  Mills:  Mr.  President,  I  would  like  to  add  a  word 
to  the  testimony  that  has  been  given  in  regard  to  the 
efficiency  and  the  untiring  efforts  that  have  been  made 
by  our  late  President  and  by  our  retiring  Secretary.  Of 
course,  as  you  know,  the  men  who  are  more  closely  asso- 
ciated with  the  officers  are  the  members  of  the  Executive 
Committee,  and  having  been  a  member  of  that  Committee 
since  the  organization  of  this  Association  I  can  speak  with 
full  knowledge,  and  I  want  the  records  of  this  Association 
to  show  that  we  thoroughly  and  heartily  appreciate  the 
untiring  efforts  of  Mr.  W.  Bayard  Van  Rensselaer,  who 
has  served  us  so  faithfully  for  the  past  fourteen  years,  and 
also  for  the  less  conspicuous,  but  not  less  important,  efforts 
put  forth  by  our  Secretary,  Mr.  William  G.  Conklin,  who 


426  HISTORY  OF  THE  SAVINGS  BANKS 

for  so  many  years  has  served  us  as   Secretary  of    this 
Association. 

The  President :  Gentlemen,  you  have  heard  the  motion 
of  Mr.  ^lills,  that  a  vote  of  thanks  on  the  part  of  the  As- 
sociation be  tendered  to  Mr.  Van  Rensselaer  and  to  Mr. 
Conklin.  The  motion  is  seconded.  Are  there  any  further 
remarks?  If  not,  all  those  in  favor  of  the  resolution  will 
manifest  it  by  rising.  The  vote  of  thanks  is  extended  by 
the  Association  to  Mr.  Van  Rensselaer  and  to  Mr.  Conklin. 

ADDRESS   OF   MR.    ANDREW   MILLS 

]\Ir.  President,  FeUow  Members  of  the  Savings  Banks 
Association :  It  is  not  my  intention  to  deliver  any  formal 
speech,  but  to  simply  state  in  a  plain  way,  or  to  give, 
rather,  to  the  members  of  the  Association,  a  history  of  the 
panic  as  affecting  the  Savings  Banks  in  Greater  New 
York,  and  to  draw  some  deductions  that  may  be  of  profit 
to  us  all. 

Outside  of  New  York,  as  near  as  I  can  learn,  there  was 
little  or  no  excitement.  The  withdrawals  for  a  long  time 
were  a  little  heavier  than  ordinarily,  but  nothing  in  the 
shape  of  a  run  evidenced  itself  in  an}'  quarter  to  any  ex- 
tent. In  New  York  the  situation  was  entirely  different. 
When  the  trust  companies  and  banks  which  had  branches 
in  the  upper  part  of  the  city  were  forced  to  suspend, 
people  having  deposits  in  the  Savings  Banks  in  the 
neighborhood  became  somewhat  excited  and  started 
to  withdraw  their  money,  so  that  this  movement,  started 
way  up  in  the  northern  part  of  the  city,  worked  itself 
down  gradually  through  the  different  sections,  coming 
down  by  the  west  side,  until  it  reached  the  centre  of  the 
city. 

At  first  we  paid  comparatively  little  attention  to  it, 
thinking  that  it  was  simply  the  fright  of  a  few  people  in 
the  neighborhoods  that  I  have  indicated,  but  we  saw 
from  day  to  day  that  the  withdrawals  were  increasing  until 
they  were  reaching  very  large  proportions,  and  a  meeting 
of  the  Savings  Bank  Presidents  of  New  York  and  Brooklyn 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   427 

was  called  at  the  Greenwich  Savings  Bank  on  Thursday 
afternoon  at  five  o'clock.  Reports  from  the  different 
banks  showed  that  the  actual  withdrawals  in  currency 
that  day  had  reached  the  sum  of  $2,500,000.  The  banks 
of  deposit,  the  commercial  banks,  and  trust  companies, 
were  in  no  position  to  supply  any  such  amount  of  money 
to  be  paid  to  people  whose  simple  desire  was  to  put  it 
between  the  mattresses  or  hide  it  in  their  stockings.  A 
Committee  of  two  was  appointed  at  this  meeting  to  which 
I  refer,  to  confer  with  the  Committee  of  the  Clearing 
House  Association  and  place  the  matter  before  them.  Mr. 
Mulry  and  myself  were  the  Committee  that  met  the  Clear- 
ing House  Association  on  the  following  morning.  We 
stated  the  case  and  told  them  that  we  were  in  a  position 
to  pay  provided  they  were  in  position  to  provide  the 
sinews  of  war.  They  advised  us  by  all  means,  in  the  in- 
terests of  the  community  at  large,  to  enforce  the  time  rule 
and  refuse  to  pay  beyond  a  limited  sum.  That  was  the 
day  on  which  the  Clearing  House  Association  decided  to 
issue  Clearing  House  certificates. 

The  adjourned  meeting  was  held  at  the  Dry  Dock 
Savings  Institution  at  one  o'clock  on  the  following  day. 
There  the  officers  reported  the  same  condition  of  affairs, 
only  that  the  withdrawals  were  on  a  larger  scale.  After 
a  long  discussion,  and  viewing  the  question  from  every 
side,  it  was  unanimously  decided  that  we  should  demand 
the  sixty-day  notice.  Our  honored  Bank  Superintendent 
was  at  the  adjourned  meeting,  and  while  some  were  hesi- 
tating as  to  the  wisdom  of  withholding  this  money  which 
might  be  used  in  channels  where  it  would  do  good,  he 
received  a  call  on  the  telephone.  He  came  back  and  said : 
*'  Gentlemen,  five  banks  have  suspended  in  Brooklyn  since 
ten  o'clock  this  morning."  There  was  no  further  argu- 
ment on  the  matter,  and  the  resolution  for  enforcing  the 
rule  was  unanimously  adopted. 

There  is  one  thing  I  want  to  say  in  recognition  of  the 
attitude  of  the  press  toward  the  Savings  Banks.  Without 
exception,  the  newspapers  published  in  the  City  of  New 


428  HISTORY  OF  THE  SAVINGS  BANKS 

York  and  Brooklyn  vied  with  each  other  in  efforts  to  re- 
assure Savings  Bank  depositors  and  to  discourage  them 
from  even  going  to  the  banks ;  and  they  did  much  that  was 
beneficial  to  the  entire  situation.  There  has  been  no  other 
opportunity  to  acknowledge  this,  but  I  take  this  oppor- 
tunity, and  ver>'  gladly,  of  doing  it. 

That  is  the  story  in  a  few  words  as  far  as  the  immediate 
effect  of  this  panic  upon  the  banks  is  concerned.  There 
are  a  few  lessons  to  which  I  would  call  your  attention. 

The  first  is  the  importance  of  requiring  notice  of  with- 
drawals on  the  first  evidence  of  a  disturbance  or  lack  of 
confidence  on  the  part  of  the  depositors.  The  time  was 
when  it  was  considered  an  evidence  of  weakness  for  a 
Savings  Bank  to  enforce  the  limit.  Why  didn't  they  pay? 
That  day  has  passed.  It  is  an  evidence  of  strength  when 
an  institution  says:  No,  we  are  not  going  to  give  you 
your  money;  we  are  not  going  to  dispose  of  the  securities 
which  belong  to  the  other  depositors  at  a  loss  simply  to 
gratify  the  few.  Gentlemen,  do  not  hesitate.  Face  that 
question  squarely.  Impress  it  upon  the  minds  of  Savings 
Bank  depositors  that  a  Sa\angs  Bank  is  not  an  institution 
to  pay  on  demand.  It  never  was  intended  to  be  such. 
The  fundamental  principle  of  the  law  on  which  it  is 
founded  says  that  you  shall  invest  your  money,  and  you 
cannot  pay  demand  deposits  with  invested  money.  The 
second  is  the  importance  of  acting  in  unison.  The  strength 
of  the  situation  in  New  York  and  Brooklyn  was  that  the 
Savings  Bank  officers  acted  in  time,  before  the  great  mass 
of  the  depositors  became  frightened,  and  consequently 
there  was  no  mob  at  any  bank.  That  was  the  first  element 
of  strength,  and  the  second  was  that  they  acted  together, 
so  that  no  bank  which  might  happen  to  be  in  a  more 
fortunate  position  than  another  could  take  to  itself  any 
credit  for  not  doing  what  was  recognized  as  for  the  common 
good  of  all. 

There  is  one  thing  that  developed  which  is  incidental 
only,  and  that  was  the  difference  in  the  time  requirements 
of  the  by-laws  of  the  different  institutions.     We  say  sixty- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   429 

day  rule,  sixty-day  law.  There  is  no  sixty-day  law.  The 
law  says  you  may  require  such  time  as  your  by-laws  pro- 
vide. The  majority  of  the  institutions  have  a  by-law 
requiring  sixty  days'  notice,  some  thirty  days,  and  some 
ninety  days,  and  one  institution  that  I  know  of,  its  actual 
requirement  to  pay  is  only  on  four  days  in  every  year. 
But  would  it  not  be  well  for  the  banks  to  consider  the 
desirability  of  having  a  uniform  by-law  throughout  the 
State  so  that  the  notice  (whatever  be  decided  upon, 
whether  it  be  sixty  days  or  ninety  days)  would  put  every 
bank  in  the  same  position?     That,  however,  is  incidental. 

Another  lesson  is  the  paramount  importance  of  accumu- 
lating a  sufficient  surplus  or  guarantee  fund.  It  was  an 
easy  thing,  when  securities  were  advancing  and  rates  of 
interest  were  falling,  for  investments  made  by  the  different 
Savings  Banks  to  show  from  time  to  time  an  appreciation 
in  value  or  paper  profit.  The  period  through  which  we 
have  passed  for  a  short  time  showed  a  decline  in  the  in- 
vestment securities  unprecedented,  and  in  my  thirty  odd 
years'  experience  in  this  business  I  do  not  recollect  the 
time  in  which  the  so-called  market  value  on  which  we 
were  then  compelled  to  report  our  securities  was  so  dis- 
turbed as  it  was  during  last  fall.  That  caused  the  thought- 
ful minds  in  the  Savings  Banks  to  turn  to  the  fact  that 
the  accumulation  of  surplus  that  had  been  criticised  so 
freely  in  times  gone  by  was  an  actual  and  fundamental 
necessity. 

Two  years  ago  in  the  Legislature  of  this  State  there  was 
presented  a  bill  compelling  Savings  Banks  to  divide  with 
their  depositors  any  excess  of  five  per  cent,  of  their  surplus 
as  based  upon  their  annual  reports.  If  that  law  had 
been  enacted  you  can  see  for  yourselves  what  the  position 
of  the  Savings  Banks  of  the  State  of  New  York  would  have 
been  on  the  3 1  st  of  December,  1 907 .  Time  and  time  again 
have  the  Savings  Banks  been  assailed  by  people  who  have 
not  given  the  question  sufficient  thought,  for  accumulating 
a  surplus  which  they  say  does  not  belong  to  anybody — 
nobody  gets  it;  it  is  no  good  to  any  one;  and  the  Savings 


43©  HISTORY  OF  THE  SAVINGS  BANKS 

Bank  officers  simply  keep  it  for  their  own  benefit.  Gen- 
tlemen, that  day,  I  am  very  thankful  to  say,  has  passed, 
and  I  think  in  the  near  future  that  neither  in  nor  out  of 
the  Legislature  will  any  Savings  Bank  be  criticised  for 
accumulating  a  sufficient  surplus  or  guarantee  fund. 

One  thing  more :  In  some  locations  immediately  on  the 
decline  in  deposits  or  the  withdrawal  of  money  the  officers 
became  worried  and  said:  here,  the  reason  for  that  is  we 
do  not  pay  interest  enough.  Now  we  have  been  paying 
three  and  a  half  per  cent.,  and  we  will  advance  our  rate 
to  four  and  we  will  keep  this  money  here. 

Gentlemen,  that  is  folly,  arrant  folly.  Ten  thousand 
times  better  for  your  institution  to  pay  three  and  one  half 
per  cent,  and  add  to  your  surplus  and  make  your  deposits 
unquestionably  safe  than  to  build  a  bank  of  enormous 
proportions.  The  fundamental  principle  of  a  Savings  Bank 
is  safety,  not  size. 

Now  it  would  be  almost  an  impossibility,  I  suppose,  to 
get  every  Savings  Bank  to  pay  the  same  rate  of  interest, 
but  the  majority  of  Savings  Banks  are  in  a  position,  that 
as  money  becomes  easier  and  the  earning  capacity  of 
money  lessens,  as  it  is  now  doing  every  day,  to  return  to 
the  rate  of  three  and  a  half  per  cent.,  and  in  my  judgment 
the  time  is  very  near  when  the  rate  of  interest  should 
be  three  and  one  half  per  cent.,  and  the  excess  of  profit 
go  to  increase  your  guarantee  fund. 

ADDRESS    OF    MR.    JOHN    HARSEN    RHOADES,    SON     OF    THE 
FORMER  PRESroENT  ' 

Mr.  President,  Gentlemen  of  the  Savings  Banks  Asso- 
ciation of  the  State  of  New  York:  I  assure  you  I  highly 
appreciate  your  courtesy  in  asking  me  to  address  you. 
I  am  honored,  yet  embarrassed,  to  stand  here.  Bearing 
the  name  of  one  who  so  many  times  addressed  you  on 
similar  occasions,  I  am  impressed  by  my  total  inability 
to  take  his  place. 

With  your  permission  I  will  divide  my  subject  into  two 
parts:    First,  "The  Financial  Outlook  of  Savings  Bank 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   431 

Investments";  secondly,  "Its  Relation  to  the  Surplus 
of  the  Banks."  The  topic  "The  Financial  Outlook  of 
Savings  Bank  Investments"  is  one  which  refers  to  future 
conditions.  But  to  forecast  the  future  it  is  necessary 
carefully  and  seriously  to  consider  the  present  and  review 
the  past. 

It  is  time  to  be  optimistic,  and  I  shall  dwell  on  the  past 
only  in  order  to  obtain  a  comprehensive  view  of  present 
and  possible  future  conditions.  No  one  can  deny  that 
within  two  years  has  occurred  a  great  decUne  in  the  value 
of  Savings  Bank  investments,  so  great  that  one  is  ap- 
palled by  its  very  magnitude,  and  yet  the  Savings  Banks  of 
this  State  are  permitted  to  invest  only  in  the  highest  grade 
securities.  Had  any  one  said,  in  1904,  that  three  years 
later  the  City  of  New  York  would  be  obliged  to  sell  a 
four  per  cent,  bond,  he  would  have  been  laughed  at, 
and  yet  the  city  in  1907  was  forced  to  sell  a  bond  bear- 
ing four  and  one  half  per  cent.  This  is  not  only  true 
in  the  case  of  our  city,  but  applies  to  other  municipalities 
as  well. 

The  immensity  of  the  decline,  and  the  fact  that  it  was 
entirely  unforeseen,  are  the  two  main  features  I  will  ask 
you  to  remember. 

Let  us  endeavor  to  find  a  cause  for  this  depreciation. 
Without  doubt  there  were  many  causes.  There  are  those 
who  believe  the  Administration  was  in  part  responsible, 
but  surely  we  cannot  blame  the  present  Administration 
for  the  decline  in  the  value  of  British  consols,  nor  in  other 
foreign  securities. 

In  my  opinion  there  is  one  theory  which  stands  so  pre- 
eminently above  others  it  should  be  given  grave  considera- 
tion. I  am  alluding  to  the  part  recently  played  by  high 
money.  The  rates  for  money  the  world  over,  and  es- 
pecially in  this  country,  remained  high  for  a  long  period. 
In  fact,  time  money  had  ruled  at  six  per  cent,  for  twenty- 
four  months.  What  was  the  result?  An  adjustment  of 
values  took  place ;  bonds  which  had  been  selling  on  a  three 
and  one  half  per  cent,  to  four  per  cent,  basis  were  not  in 


432  HISTORY  OF  THE  SAVINGS  BANKS 

harmony  with  money  at  six  per  cent.,  for  a  difference  of 
one  half  of  one  per  cent,  between  time  money  and  legal 
bond  bases  may  be  considered  normal.  I  trust  you  will 
not  misunderstand  me.  I  do  not  wish  to  imply  that 
temporary  high  money  will  cause  a  decline,  but  that  con- 
tinued high  rates  will  ultimately  result  in  lower  prices  for 
bonds. 

Assuming  that  the  prices  of  bonds  depend  largely  upon 
money  rates,  we  must  naturally  look  for  a  reason  for  the 
high  money  which  prevailed.  Many  theories  might  be 
advanced  to  account  for  this  condition,  and,  among  them, 
the  great  prosperity  and  business  expansion  throughout 
the  land.  No  doubt  earthquakes  and  wars  played  their 
part,  but  it  seems  to  me  that  what  might  be  called  over- 
prosperity  was  the  chief  cause  for  high  money.  Gentle- 
men, to  continue  my  line  of  argument — what  occasioned 
over-prosperity?  Was  it  the  growth  of  a  young  country 
with  immense  resources?  Perhaps,  but  I  believe  the  in- 
creased output  of  gold  played  a  most  important  part. 
It  is  an  established  economic  fact  that  an  increased  gold 
production  will  cause  a  rise  in  commodities.  We  had  a 
similar  result  in  1849,  ^^  the  time  of  the  gold  discoveries  in 
California.  Does  it  not  seem  rational  that,  with  a  rise 
in  commodities,  over-speculation  will  be  engendered  not 
only  in  the  commodities  themselves,  but,  through  their 
rise,  in  general  lines  of  trade,  and  does  not  this  over- 
speculation  mean  a  demand  for  money,  naturally  fol- 
lowed by  higher  rates?  And  higher  rates  denote  lower 
prices  for  bonds. 

It  may  occur  to  you  to  ask  why  we  are  witnessing  easier 
money  while  the  gold  output  continues.  May  we  not 
assume  that  the  shock  to  credit  and  loss  of  confidence  have 
brought  an  end  to  over-speculation,  and  that  curtailment 
in  speculation  more  than  offsets  the  effects  of  a  continued 
output  of  gold? 

It  is  extremely  difficult  in  a  few  words  to  explain  the 
effects  of  the  ever-increasing  supply  of  gold,  but  for  the 
present  I  am  convinced  that  the  continued  output  (more 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   433 

than  the  needs  of  the  country  demanded)  has  been  an 
important,  perhaps  the  most  important,  cause  for  the 
decline  in  the  value  of  securities  of  fixed  income,  a  decline 
which  has  extended,  with  intermittent  rallies,  over  a 
period  of  twenty  years. 

Let  us  now  turn  to  some  special  Savings  Bank  bonds. 
Several  years  ago  the  deposits  of  the  Savings  Banks  had 
grown  to  such  an  extent  that  it  seemed  advisable  to  en- 
large the  scope  of  investment,  yet  the  men  who  were 
influential  in  bringing  this  about  might  have  acted  in  a 
different  manner  had  they  been  able  to  foresee  the  con- 
sequences. It  was  essential  that  the  scope  should  have 
been  broadened,  but  the  result  was  unfortunate.  For 
fear  of  pernicious  legislation  the  door  was  opened  slowly 
and  first  a  few  bonds  admitted.  Immediately  a  great 
demand  was  created  for  these  particular  issues,  with  the 
effect  that  their  prices  were  forced  far  above  the  compara- 
tive investment  value.  I  do  not  desire  to  criticise  the 
motives  of  those  who  were  interested  in  extending  the 
scope,  for  there  were  reasons  then  why  it  was  inadvisable 
to  admit  too  many  bonds  at  one  time. 

Another  feature  must  not  be  passed  unnoticed,  the  law 
of  supply  and  demand.  We  know  the  scope  of  Savings 
Bank  investments  is  being  enlarged  from  time  to  time 
as  new  securities  become  available  under  the  law,  and  a 
large  rise  in  bonds  cannot  be  expected  until  the  demand 
becomes  greater  than  the  supply.  In  considering  values 
for  the  immediate  future  it  is  well  to  be  optimistic.  The 
over-extension  of  credit  brought  to  an  abrupt  end  by  the 
October  panic  caused  a  decline  in  general  business ;  hence, 
temporarily,  easier  money  should  prevail  and  does  prevail; 
for  how  long,  it  cannot  be  said.  A  similar  result  occurred 
in  1903  and  1904.  In  1904  high-grade  investment  securi- 
ties advanced  materially,  to  be  followed  by  the  fall  in 
values  between  the  years  1905  and  1907.  Should  history 
repeat  itself,  we  will  see  an  advancing  market  for  at  least 
a  year  or  more,  but  the  improvement  will  be  slow.  Con- 
fidence was  badly  shaken,  and  confidence  is  a  thing  of 


434  mSTORY  OF  THE  SAVINGS  BANKS 

slow  growth,  lost  in  a  moment;  months,  nay  years,  are 
often  required  to  restore  it. 

Perhaps  it  would  be  well  not  to  assume  bonds  will  sell 
again  at  the  high  prices  reached  in  the  past,  for,  if  there  be 
truth  in  the  theory  of  an  ever-increasing  output  of  gold, 
Savings  Bank  securities  may  sell  on  a  still  higher  income 
basis  in  the  future.  On  the  p>ossibility  that  bonds  may 
again  decline,  I  would  call  your  attention  to  the  effect 
of  such  decline  upon  the  surplus  of  the  banks,  and  so  to 
turn  to  the  second  part  of  my  subject,  "The  Relation  of 
Future  Values  to  a  Bank's  Surplus." 

On  December  31,  1907,  the  Savings  Banks  of  this  State 
were  (under  the  law  since  altered)  obliged  to  determine 
their  surplus  by  taking  their  security  investments  at  the 
estimated  market  value.  December  31st  was  two  months 
after  the  panic,  and  prices  then  were  practically  the  same 
as  they  had  been  in  the  July  previous,  and,  furthermore, 
on  the  average,  the  fall  in  values  between  December,  1906 
and  1907,  and  the  rise  since  the  last  mentioned  date  have 
been  small.  This  statement  may  seem  astounding,  never- 
theless it  is  true,  and  I  have  the  proof  before  me.  It  fol- 
lows, then,  that  on  December  31,  1907,  bonds  were  not  at 
panic  prices.  The  crisis  of  the  panic  had  passed,  and  an 
improvement  in  values  begun.  The  point  that  should  be 
emphasized  is  this:  that,  after  securities  have  ruled  at  a 
certain  level  of  price  for  a  period  of  six  or  twelve  months, 
it  is  time  to  recognize  that  their  current  quotations  express 
their  true  value. 

Gentlemen,  is  it  not  true  that  the  great  decline  in  high- 
grade  securities  has  eaten  into  the  surplus,  if  based  upon 
market  values?  I  fully  realize  that  there  are  those  who 
believe  the  surplus  of  a  Savings  Bank  should  not  be  based 
upon  the  market,  which  is  ever  changing,  but  with  those 
gentlemen  I  beg  to  differ.  I  believe  the  surplus  of  a  Savings 
Bank  should  be  based  upon  the  estimated  market  value 
of  its  assets.  In  fact,  although  opposed  to  making  it  a 
law,  I  favor  greater  conservatism,  believing  it  would  be 
better  for  a  Savings  Bank  not  to  value  those  assets  selling 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   435 

above  cost  for  more  than  their  purchase  price  until  sold, 
for,  in  doing  so,  it  is  crediting  its  depositors  with  profits 
before  they  are  earned.  In  the  future,  if  the  banks  were 
required  by  law  (which  I  believe  essential)  to  maintain  a 
fixed  percentage  of  surplus,  such  a  process  would  increase 
it,  and  permit  a  bank  to  pay  a  larger  dividend  than  it 
actually  earned,  A  Savings  Bank  should  not  value  those 
assets  selling  below  cost  above  the  market,  for,  if  so,  it  is 
crediting  its  depositors  with  funds  which  do  not  exist, 
even  on  paper,  and  amortization  at  cost  might  cause  this 
to  be  done. 

Is  it  necessary  to  mark  bonds  up  which  have  risen  above 
cost,  though  still  unsold,  merely  because  it  is  essential 
to  mark  bonds  down  which  are  selling  below  cost?  I 
hardly  think  so,  when  we  realize  that  Savings  Bank  invest- 
ments as  a  whole  are  of  such  high  order  that  to  a  large 
extent  their  values  rise  and  fall  together.  Why  build  up 
a  surplus  through  a  rise  in  bonds?  One  built  upon  such 
lines  could  easily  be  depleted  by  a  corresponding  decline. 
If  securities  were  never  valued  above  cost,  the  reported 
surplus  would  not  be  so  ever-changing.  Moreover,  when 
bonds  were  selling  at  abnormally  high  prices  the  surplus 
in  reality  would  be  larger  than  what  appeared  on  the 
surface,  and  would  not  this  be  an  excellent  automatic 
arrangement? 

There  are  those  who  claim  figuring  the  surplus  on  market 
values  is  unnecessary,  presuming  that  all  Savings  Bank 
bonds  will  be  paid  at  maturity.  Mortgages  have  an 
average  of  three  years  to  run,  but  many  bonds  have  fifty. 
Why  discount  conditions  so  far  ahead?  If  we  keep  our 
bonds  at  the  market,  every  six  months  we  will  know 
whether  our  surplus  be  adequate.  They  also  claim  that 
depositors,  as  a  unit,  will  not  withdraw  their  money. 
For  the  present  this  is  true.  For  the  depositors  have 
confidence  in  the  Savings  Banks  of  this  State.  But  sup- 
pose at  some  future  time  there  should  be  such  a  decline 
in  securities  that  the  banks  found  their  assets  not  equal 
to  their  liabilities,  and  a  deficit  existed — imagine  these 


436  HISTORY  OF  THE  SAVINGS  BANKS 

conditions  to  prevail  long  enough  for  the  depositors  to 
find  them  out!  If  one  bank  were  in  this  condition,  it 
would  be  proper  for  the  Superintendent  to  close  it,  but 
conceive  a  situation  where  all  the  banks  suddenl]^  found 
themselves  in  a  similar  position.  Of  course  we  believe 
the  trustees  and  the  officers  are  not  legally  responsible. 
But  is  there  no  moral  responsibility?  The  depositors 
are  not  told  that  if  at  some  future  date  there  be  a  decline 
in  the  market  it  might  be  impossible  to  pay  all  in  full,  yet, 
they,  as  a  unit,  expect  to  be  paid  in  full,  and,  as  a  matter 
of  fact,  every  one  has  been  paid  for  years. 

Should  not  a  Savings  Bank  at  all  times,  under  all  con- 
ditions, be  in  a  position  to  treat  depositors  with  equal 
consideration?  Is  it  morally  right  to  pay  back  the  prin- 
cipal and  interest  to  some  during  a  period  of  depressed 
value  and  not  maintain  an  adequate  reserve,  based  upon 
market  values,  to  safeguard  the  remainder?  Who  are 
the  remainder?  Men,  women,  the  majority  poor  and 
ignorant,  who,  not  knowing  how  to  invest  their  money, 
have  shown  their  confidence  by  leaving  their  funds  in  the 
care  of  the  bank.  Gentlemen,  it  would  be  better  to  reduce 
the  dividend  rate  to  two  and  a  half  per  cent.,  and  build 
up  a  surplus  of  twenty,  then  jeopardize  the  principal  of 
these  depositors,  and  I  believe  they  represent  seventy- 
five  per  cent,  of  the  depositors  of  our  banks  to-day. 

The  law  which  has  just  passed  our  Legislature,  provid- 
ing in  a  manner  approved  by  the  Superintendent  for  the 
amortization  or  gradual  extinction  of  premiums  or  dis- 
counts of  securities,  appears  to  me  to  be  unwise.  It  does 
not  follow  the  original  recommendations  of  our  Superin- 
tendent. It  may  operate  to  hide  a  deficit  or  destroy  a 
surplus,  but  one  thing  it  will  never  do — show  the  actual 
and  true  condition  of  a  bank.  For  the  law  no  longer 
exists  which  at  stated  periods  compelled  an  institution  to 
value  its  assets  at  the  estimated  market  value.  In  the 
crisis  of  one  of  our  panics  I  am  a  firm  believer  in  the 
adoption  of  an  emergency  measure,  but  I  do  not  believe 
in  the  enactment  of  an  emergency  law. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    437 

We  know  the  Superintendent  has  the  right  to  ask  for  a 
report  of  the  surplus  based  upon  market  values,  in  order 
that  he  may  learn  whether  a  bank  be  solvent,  but  should 
so  vital  a  matter  be  left  to  the  discretion  of  the  Superin- 
tendent? Should  not  the  law  make  it  mandatory  for 
officers  and  trustees  to  keep  themselves  posted  and  furnish 
at  stated  periods  to  the  Superintendent  the  amount  of 
their  bank's  surplus?  If  they  were  not  required  by  law 
to  value  their  securities  at  the  market,  at  times,  some 
might  be  ignorant  as  to  whether  their  assets  were  equal 
to  their  Habilities,  and  is  not  this  knowledge  essential, 
in  order  to  treat  depositors  with  equal  consideration? 

Once  and  for  all  time  to  mark  off  the  premium  on  a 
bond,  when  purchased,  is  a  form  of  amortization  which 
is  not  perfect,  because  it  destroys  forever  the  opportunity 
to  judge  the  true  earning  power  of  an  institution  for  any 
six  months'  period.  Amortization,  as  suggested  by  the 
new  law,  if  used  for  the  purpose  of  arriving  at  the  true 
earning  power  of  an  institution  for  a  period  of  six  months, 
is  an  excellent  plan,  for  there  is  no  better  way  to  figure 
the  earning  power  of  a  Savings  Bank  than  through  this 
form  of  amortization,  and  I  believe  we  would  welcome 
such  a  law  if  reenforced  by  another  compelling  the  banks 
to  figure  their  surplus  on  market  values. 

The  advocates  of  the  present  law  claim  that  their  plan 
would  work  automatically,  bringing  in  the  end  the  desired 
results,  but  ultimately  they  would  be  obliged  to  turn  to 
market  values  to  learn  if  the  desired  results  had  been 
obtained.  Again  the  very  condition  of  affairs  which 
makes  it  possible  to  purchase  Savings  Bank  bonds  at  a 
high  income  basis  and  offset  those  purchased  on  a  low, 
while  brought  about  by  other  causes,  is  partly  maintained 
because  the  Savings  Banks  at  such  times  have  no  money 
to  invest.  And  by  the  time  they  are  ready  to  invest  the 
bargains  may  be  gone.  Even  if  some  had  money,  human 
nature  is  such  that  I  believe  only  a  few  would  be  disposed 
to  take  advantage  of  the  conditions  prevailing.  Are  we 
not  all  inclined  to  buy  securities  when  high  and  sell  them 


438  HISTORY  OF  THE  SAVINGS  BANKS 

when  low?  If  the  desired  results  were  attained,  I  am 
sure  it  would  take  a  great  number  of  years  to  bring  them 
about.  How  many  bonds  have  been  bought  by  the  Sav- 
ings Bank  during  the  last  twelve  months,  when  bargains 
were  offered? 

The  panic  of  1907  and  the  long  decline  have  brought  us 
face  to  face  with  an  interesting  situation,  so  interesting 
that  it  warrants  serious  thought;  for  the  great,  unexpected 
decline  in  securities  and  the  possibility  of  its  recurrence, 
force  us  to  contemplate  a  new  phase  in  Savings  Bank 
affairs.  If  there  be  truth  in  the  theory  of  an  ever-increas- 
ing output  of  gold,  there  may  be  another  great  decline  in 
the  future,  and  if  there  be  no  truth  in  the  theory,  is  it 
not  even  then  a  mistake  to  remain  idle  in  the  hope  that 
bonds  will  again  sell  at  high  prices,  and  adequate  reserves 
be  restored?  Why  not  stop  speculating  as  to  the  future? 
Is  it  not  necessary  for  a  Savings  Bank  officer,  at  times,  to 
meet  a  situation  as  he  finds  it?  Some  guessing  is  un- 
avoidable, but  too  much  is  fatal. 

We  concede  the  money  belongs  to  the  depositors,  and 
that  the  maintenance  of  too  large  a  surplus  would  be  an 
injustice  to  them,  for  a  Savings  Bank  should  not  be  a 
stock  company  nor  a  money-making  concern.  All  earn- 
ings above  the  maintenance  of  an  adequate  surplus  should 
belong  to  the  depositors.  The  fact,  nevertheless,  that 
there  are  no  stockholders  to  hold  liable,  nor  capital  to  fall 
back  upon,  is  an  excellent  reason  for  maintaining  an  ade- 
quate reserve. 

The  Savings  Banks  differ  materially  from  the  national 
banks  and  trust  companies.  The  sixty-day  notice  in  it- 
self annuls  the  necessity  of  a  large  surplus,  but  can  it  be 
said  that  a  Savings  Bank  should  have  no  surplus  at  all? 
No  doubt  in  the  past  the  reserve  was  adequate,  for  then  we 
had  no  idea  that  Savings  Bank  securities  could  decline  to 
so  great  an  extent,  but  I  am  trying  to  call  your  attention 
to  existing  conditions  and  to  future  possibilities. 

Properly  to  build  up  the  reserve  of  the  banks  will  require 
a  reduction  in  dividend  rates.    This  could  easily  be  effected 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   439 

if  the  banks  would  stand  together  and  make  their  rate 
uniform.  Under  present  conditions,  I  do  not  believe  they 
would  lose  many  deposits,  and  they  certainly  would  not 
if  the  depositors  knew  the  reason  why  the  dividends  were 
reduced;  but  what  if  they  should  lose?  Can  we  doubt 
that  in  the  end  they  would  regain  from  bona  fide  deposi- 
tors all  they  lost  and  more?  The  Post  Office  Savings 
Banks  of  Great  Britain,  backed  by  the  government,  to  be 
sure,  pay  only  two  and  one  half  per  cent,  interest,  and 
have  an  army  of  depositors  composed  absolutely  of  the 
non-investing  class.  The  amount  of  those  deposits  on 
January  i,  1906,  was  £155,000,000.  Even  though  our 
Savings  Banks  are  not  Government  institutions,  is  it  not 
possible,  and  would  it  not  be  beneficial,  for  the  State  of 
New  York,  in  proportion  to  its  inhabitants,  to  strive  for 
a  similar  result?  There  is  a  Savings  Fund  Society  in 
another  State  which  pays  but  three  and  one  half  per  cent, 
interest,  and  has  a  fist  of  265,000  depositors  composed 
almost  entirely  of  the  non-investing  class.  In  the  year 
1907  this  institution  gained  over  5,000  depositors,  and 
increased  its  deposits  over  three  and  a  half  million  dollars. 
Since  January  ist  it  has  gained  two  hundred  thousand 
dollars  in  deposits.  Even  though  we  recognized  the  fact 
that  it  is  one  of  only  three  institutions  in  a  large  city, 
nevertheless  its  record  is  a  proud  one. 

Gentlemen,  a  Savings  Bank  is  an  institution  for  savings, 
and  should  resemble  a  safe  deposit  company  more  than  a 
trust  company.  If  we  are  to  compete  for  trust  company 
business,  we  had  better  become  stock  companies  at  once 
and  enter  the  field  fully  equipped  to  succeed.  If  it  be  the 
ambition  of  some  of  our  officers  and  trustees  to  be  con- 
nected with  the  biggest  Savings  Bank  in  the  State,  nat- 
urally it  must  be  their  ambition  to  be  connected  with  the 
strongest,  and  should  not  the  size  of  a  Savings  Bank  be 
measured  by  the  number  of  the  depositors  rather  than 
by  the  amount  of  its  deposits?  And  should  not  its  strength 
be  measured  by  the  amount  of  its  actual  surplus  rather 
than  by  the  amount  of  a  false  one  obtained  through  amor- 


440  HISTORY  OF  THE  SAVINGS  BANKS 

tization?  \\Tiat  are  the  functions  of  a  Savings  Bank? 
And  for  what  purpose  was  it  created?  It  was  created  for 
the  sole  purpose  of  encouraging  thrift — saving — among 
the  non-investing  class  of  our  population,  and  the  rate 
of  interest  is  a  secondary  matter.  Is  not  its  function  to 
receive  the  savings  of  these  people,  to  invest  them  with 
the  greatest  care,  and  to  manage  the  affairs  of  the  bank 
in  such  a  way  that  the  principal  of  all  shall  be  to  the  best 
knowledge  and  belief  of  the  officers  and  trustees  at  all 
times  intact?  Certainly  this  is  the  understanding  of 
every  depositor,  whether  he  be  intelligent  or  other\vise. 
Safety  of  principal — rpayable  on  demand — should  be  the 
aim  of  every  Savings  Bank  officer  and  trustee.  Unfor- 
tunately, in  this  great  country  of  ours,  owing  to  our  de- 
fective currency  system,  we  are  visited  occasionally  by 
severe  panics,  and  so  we  are  forced  to  reserve  the  privilege 
of  demanding  a  thirty,  sixty,  or  ninety  day  notice,  the 
purpose  being  to  give  our  banks  time  to  sell  such  securities 
as  are  necessary,  and  also  to  give  time  for  the  panic  to 
subside  and  the  depositors  to  recover  from  their  fright. 
I  look  upon  our  sixty-day  clause  as  I  do  upon  the  Clearing 
House  certificates  of  a  national  bank,  an  unfortunate 
necessity.  Yet  I  believe  it  to  be  essential  that  a  Savings 
Bank  should  constantly  endeavor  to  keep  itself  in  a  posi- 
tion to  meet  its  liabilities,  and  be  able  to  liquidate  at  the 
market,  in  a  reasonable  space  of  time,  and  remain  solvent. 
Are  circumstances  such  to-day,  or  can  they  occur  in  the 
future,  as  would  compel  us  to  depart  from  these  fundamen- 
tal principles?  If  so,  I  firmly  believe  it  would  result  in 
the  estabhshment  of  Postal  Savings  Banks  throughout 
the  cities  of  this  State,  and  would  signify  a  change  in  the 
whole  system,  with  man}'  new  laws.  The  founding  in 
this  country-  of  Postal  Savings  Banks,  with  the  Govern- 
ment behind  them,  is  not  a  dream.  It  is  a  probability. 
And  yet  I  doubt  if  there  be  a  man  present  who  is  anxious 
to  see  them  established  in  the  cities  of  this  State.  And 
too  large  a  dividend  will  not  keep  them  out,  for  if,  by  pay- 
ing four  per  cent,  and  catering  to  the  investor  class,  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   441 

chances  are  increased  of  being  forced  to  fall  back  upon 
the  sixty-day  clause,  it  would  not  take  many  experiences 
of  this  character  before  depositors  would  much  prefer  to 
place  their  money  in  the  Postal  Savings  Banks,  where 
it  would  always  be  payable  on  demand. 

Gentlemen,  can  it  be  denied  that  considerable  money 
drifted  into  the  Savings  Banks,  especially  in  this  city, 
which  should  have  found  its  way  into  the  trust  companies 
and  national  banks?  Several  cases  have  been  brought  to 
my  attention  where  individuals  have  had  from  $25,0x30 
to  $50,000  scattered  among  the  banks  of  this  State,  and 
the  people  I  have  in  mind  were  capable  of  investing  their 
own  money,  and  were  much  distressed  during  the  panic, 
that  they  were  unable  to  obtain  their  funds  for  the  pur- 
pose of  investment.  Some  of  the  individuals  to  whom  I 
refer  deposited  their  money  two  years  ago  when  the 
Savings  Banks,  by  paying  four  per  cent.,  were  offering  to 
the  public  a  better  investment  than  could  be  obtained  else- 
where with  like  security,  and  now  the  same  individuals  are 
withdrawing  their  deposits,  principal  and  interest  intact. 
Who  are  the  losers?  The  remaining  depositors.  Such 
being  the  case,  can  it  be  denied  that  an  adequate  reserve 
is  essential  to  protect  them,  and  would  a  reserve  based 
upon  amortization  at  cost,  regardless  of  whether  securities 
were  selling  above  or  below,  answer  the  purpose? 

If  the  banks  had  been  paying  three  and  one  half  per  cent, 
the  public  would  not  have  been  so  anxious  to  deposit  its 
money,  but,  by  paying  four  per  cent.,  they  invited  these 
people  to  do  so.  Can  the  public  be  blamed  for  taking  ad- 
vantage of  such  a  golden  opportunity? 

Some  banks  claim  they  are  earning  over  four  per  cent., 
and  are  entitled  to  pay  four  per  cent,  to  their  depositors. 
But  how  is  it  sometimes  earned?  Because  the  law  does 
not  compel  them  to  maintain  a  fixed  percentage  of  surplus. 
Suppose  the  two  years'  decline  had  been  much  greater 
and  every  bank  in  the  State  had  a  large  deficit  to-day; 
would  it  not  be  folly  to  claim  that  during  those  two  years 
they  had  earned  four  per  cent.?     It  would  seem  as  though 


442  HISTORY  OF  THE  SAVINGS  BANKS 

a  Savings  Bank  should  decide  upon,  adopt,  and  maintain 
a  fixed  percentage  of  surplus,  or  at  least  know  it  is  solvent, 
before  it  can  consider  earnings,  and  after  this  fact  is  known 
then  and  only  then  can  it  base  its  earnings  upon  amortiza- 
tion at  cost.  In  the  past  a  small  surplus  appeared  ample, 
but  when  you  remember  the  immensity  of  the  decline,  and 
the  fact  that  it  was  entirely  unforeseen,  can  we  now  main- 
tain that  five  per  cent,  is  too  large?  In  the  light  of  what 
has  occurred,  would  it  not  be  better  for  the  larger  banks 
to  maintain  even  ten  per  cent.?  In  Pennsylvania  the 
law  requires  the  maintenance  of  a  seven  and  one  half  per 
cent,  surplus.  In  Massachusetts  the  law  compels  a  Sav- 
ings Bank  every  six  months  to  set  aside  from  net  profits 
not  less  than  one  eighth  nor  more  than  a  quarter  per  cent, 
of  total  deposits  in  order  to  build  up  and  maintain  a  five 
per  cent,  surplus  or  a  guarantee  fund.  And  when  ten  per 
cent,  is  reached  it  must  pay  an  extra  dividend.  Are  you 
aware  we  have  no  such  law  in  our  State,  and  do  you  realize 
it  is  left  to  the  discretion  of  the  trustees  to  reserve  such 
amount  as  they  deem  expedient?  A  law,  similar  to  the 
ones  existing  in  Pennsylvania  and  Massachusetts,  should 
be  enacted  In  this  State,  for  the  adoption  of  such  a  law 
would  tend  to  prevent  the  recurrence  of  the  situation 
which  our  banks  were  obliged  to  face  in  December.  The 
fact  that  we  shall  be  forced  to  pay  a  larger  tax  to  the 
State  is  no  reason  to  my  mind  why  we  should  not  have  a 
law  which  compels  us  to  maintain  a  fixed  percentage  of 
surplus  to  assist  us  in  keeping  our  banks  solvent. 

The  panic  of  1907  is  behind  us,  but  has  not  the  decline 
in  bonds  proved  the  truth  of  three  things  which  in  the  past 
were  considered  doubtful?  First:  Savings  Bank  invest- 
ments are  not  always  free  from  great  shrinkage  in  value. 
Second:  Depositors  will  at  times  withdraw  large  sums 
of  money.  And  third:  Securities  occasionally  must  be 
sold. 

Gentlemen,  we  are  entering  upon  a  period  of  slow  up- 
building and  reconstruction,  and  the  men  needed  to-day 
are  the  men  who  can  rebuild,  upon  sound  banking  princi- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   443 

pies,  the  weak  financial  structures  which  fell  in  October; 
but  let  us  not  forget  a  panic  exposes  the  weak  spots  in  the 
strongest  of  institutions,  and  even  the  Savings  Banks  have 
not  escaped  this  time  unscathed.  We  should  not  lose 
sight  of  the  fact  that  the  banks  have  sustained  during  the 
past  few  years  a  continuous  decline  in  the  value  of  their 
assets,  culminating  in  the  panic  prices  of  October.  The 
failure  to  realize  this  protracted  decline,  and  the  earnest 
desire  on  the  part  of  the  banks  to  pay  full  earnings,  have 
operated  against  the  safety  of  the  depositors'  principal. 

I  am  optimistic  as  to  the  immediate  future,  but,  in 
writing  on  the  financial  outlook,  I  am  forced  to  consider 
the  ultimate  future,  and  I  believe  we  will  again  experience 
periods  of  depression  with  declining  bond  markets,  until 
at  least  our  currency  and  banking  system  has  been  im- 
proved, and  when  I  realize  the  necessity  of  a  Savings  Bank 
remaining  solvent,  and,  what  is  more,  maintaining  an 
adequate  surplus  to  insure  solvency,  I  am  anxious  to  take 
time  by  the  forelock  and  correct  any  weaknesses  that  may 
exist  to-day.  If  the  Savings  Bank  Law  now  on  the  statute 
books  of  New  York  State,  forbidding  the  payment  of  over 
five  per  cent,  dividends,  were  modified  to  establish  a  uni- 
form rate  not  exceeding  three  and  one  half  per  cent,  with 
permission  to  pay  an  extra  dividend  after  the  surplus  shall 
equal  fifteen  per  cent,  of  total  deposits,  I  am  confident  that 
many  puzzling  problems  would  be  solved;  and  I  believe 
the  law  could  be  changed  were  the  majority  of  the  banks 
to  favor  it  and  exert  their  influence  to  that  end;  and  if  I 
am  correct,  why  not  change  it?  But,  gentlemen,  if  the 
majority  of  you  concur  in  the  wisdom  of  reducing  the  rate 
of  interest,  why  wait  for  the  law? 

If  any  bank  has  a  ten  per  cent,  surplus  at  market  values 
to-day,  it  has  the  unquestionable  right  to  pay  four  per 
cent.,  but  should  not  this  payment  be  carefully  weighed,  in 
deference  to  the  interests  of  sister  institutions,  for  a  mem- 
ber of  an  association  must  concede  there  are  rights,  not 
enforceable  by  law,  which,  nevertheless,  should  be  re- 
spected? 


444  HISTORY  OF  THE  SAVINGS  BANKS 

Gentlemen,  there  are  many  able  men  before  me,  and  it 
is  unbecoming  in  me,  a  stranger  among  you,  to  criticise. 
I  assure  you  I  have  had  no  desire  to  do  so,  in  fact,  criticism 
is  out  of  place,  for  no  one  can  be  blamed  for  a  situation 
which  could  not  have  been  foreseen,  but,  in  attempting 
to  read  the  future,  we  are  compelled  to  consider  present 
conditions  and  recall  unavoidable  errors  of  the  past. 

An  interesting  paper  was  read  by  Mr.  Wm.  J.  Lovejoy, 
of  the  Fulton  SavingsBank,  on  the  "Insuring  of  Deposits." 

THE  THEORY  AND  PRACTICE  OF  SAVINGS  BANKS 

The  following  paper  on  The  Theory  and  Practice  of 
Savings  Banks  was  read  by  Mr.  Hanaman,  President  of 
the  Troy  Savings  Bank: 

When  Mr.  Van  Rensselaer  and  Mr.  Miller  urged  me  to 
address  you  on  this  occasion,  I  had  in  mind  the  writing  of  a 
paper  in  which  would  be  traced  the  development  of  the 
idea  upon  which  our  form  (the  Trustee  Savings  Bank) 
is  based,  gi\^g  an  analysis,  both  of  the  theory  involved 
and  of  the  manner  in  which  we  have  put  that  theory  into 
practice,  which  would  be  as  exhaustive  as  I  could  make  it. 
Circumstances  over  which  I  have  no  control  have  pre- 
vented my  doing  this,  and  what  I  have  to  say  to-day  will 
be  limited  to  pointing  out  one  or  two  phases  of  our  prac- 
tice, which  it  seems  to  me  are,  to  say  the  least,  antithetic  to 
our  theory. 

Our  theory,  or,  rather,  the  theor>'  of  the  Trustee  Savings 
Bank,  as  I  understand  it,  and  as  such  writers  as  Prof. 
James  H.  Hamilton  of  the  Syracuse  University  defines 
it,  is  that  of  an  institution  established  by  members  of  the 
well-to-do  for  the  purpose  of  improving  the  condition  of 
the  poorer  classes,  and  involves  a  self-sacrificing  service 
on  the  part  of  a  few  in  the  interests  of  the  masses.  The 
method  by  which  it  is  sought  to  affect  the  improvement 
attempted  is  that  of  encouraging  habits  of  saving  and 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   445 

thrift  among  wage-earners,  and  those  who  are  naturally 
inclined  to  be  improvident. 

A  glance  at  the  manner  in  which  the  laws  which  govern 
our  work  have  had  their  origin  most  clearly  defines  the 
theory  involved.  Certain  well-to-do  citizens,  actuated 
by  a  purely  philanthropic  motive,  having  offered  to  give 
their  services  to  the  pubHc  without  reward  or  recompense 
of  any  sort,  in  the  work  of  encouraging  the  small  wage- 
earner,  the  laboring  man,  the  clerk,  the  artisan,  the 
mechanic,  etc.,  to  lay  by  for  a  time  of  need  a  portion  of 
his  daily  earnings,  which  the  said  philanthropists  would 
surely  care  for  and  cause,  by  most  conservative  investment, 
to  increase  in  value  by  the  addition  to  the  original  deposit 
of  interest  earned  by  the  said  investment. 

The  public,  accepting  this  offer,  has  gradually  caused 
to  be  enacted  such  laws  as  shall  protect  both  the  givers  and 
the  recipients  of  this  service  from  the  intrusion  of  others, 
who,  under  the  guise  of  philanthropy,  might  be  actuated 
by  motives  of  self-interest ;  in  other  words,  the  public  has 
locked  the  offer  of  the  philanthropists  in  the  iron  grasp  of 
the  law,  so  that,  in  so  far  as  the  main  features  of  the  origi- 
nal offer  are  concerned,  the  Savings  Bank  Trustee  has  now 
no  discretion,  excepting  within  the  hard  and  fast  lines 
marked  out  for  him  by  the  public  in  the  law. 

On  the  other  hand,  the  Savings  Bank  Trustee,  as  a  mem- 
ber of  the  said  public,  has  used  his  influence  with  the  law- 
makers to  prevent  legislation  that  would  jeopardize  the 
philanthropic  intent  of  the  original  offer.  The  result  is 
that  we  have  the  philanthropic  intent  of  the  originators 
of  this  service  reasonably  protected  by  law,  and  more  per- 
fectly so  in  New  York  State  than  anywhere  else  in  the 
country.  But  after  all,  the  law  is  not  our  theory,  and  is 
not  intended  nor  expected  to  do  more  than  prevent  any 
flagrant  misuse  of  the  money  with  which  our  trustees  have 
been  entrusted.  Our  theory  should  be  the  searchlight 
by  which  the  path  of  duty  shall  be  most  clearly  marked 
out  and  kept  in  view,  and  the  intent  of  the  conception 
which  justifies  the  existence  of  a  Savings  Bank  be  most 


446  HISTORY  OF  THE  SAVINGS  BANKS 

effectively  carried  out.  Our  theory  requires  that  we 
should  not  only  safely  invest  the  money  with  which  we 
have  been  entrusted,  so  that  the  deposits  shall  increase 
in  value,  by  the  addition  to  them  of  the  net  earnings  pro- 
duced by  such  investments,  but  that  this  duty  of  re- 
ceiving and  caring  for  these  deposits  shall  be  performed 
in  the  interests  of  a  certain  class  of  persons— namely, 
those  who  need  encouragement  in  order  to  develop  and 
establish  in  themselves  habits  of  saving  and  thrift;  and 
of  a  class  whose  earning  capacity  is  not  greatly  in  excess 
of  their  daily  needs. 

It  seems  to  me  that  no  other  influence  can  be  logically 
drawn  from  the  premises  which  justifies  the  existence  of 
our  institutions  than  that  they  are  intended  for  a  single 
class  of  persons,  and  that  all  other  financial  needs  of  the 
community  are  amply  provided  for  by  the  commercial 
banks,  to  which  our  institutions  are  positively  antithetic, 
both  in  conception  and  function.  How  about  our  prac- 
tice? We  have  not  violated  the  law,  perhaps,  but  have 
been  impelled  by  a  desire  to  reach  the  class  of  citizens 
who,  according  to  our  theory,  furnish  the  only  justification 
for  the  existence  of  our  institutions.  Have  we  not  been 
impelled  too  much  by  a  perhaps  unnatural  desire  to  see 
our  institutions  grow,  without  any  particular  regard  as 
to  how  that  growth  has  been  attained  so  long  as  we  did 
not  infringe  the  law?  Have  we  not  measured  the  success 
of  our  work  more  by  the  amount  of  our  liabilities  than  by 
the  number  of  people  among  our  depositors  who  belong 
to  the  class  for  whose  benefit  our  theory  declares  it  to  be 
our  whole  duty  to  labor?  But  many  will  probably  say, 
and  a  majority  probably  think,  that  such  a  state  of  affairs 
is  rather  to  our  credit  than  otherwise,  for,  say  they,  do 
we  not  show  the  true  spirit  of  altruism  if  we  extend  the 
gift  of  our  service  to  all  who  are  willing  to  accept  it? 

There  might  be  no  objection  to  such  freedom  in  our 
philanthropy  if  it  did  no  harm  to  the  interests  of  those 
who  most  need  our  service  and  for  whose  particular  benefit 
that  service  stands.     That  such  excess  of  generosity  on 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   447 

our  part  has  not  been  wholly  free  from  harm  to  the  higher 
interests  of  those  who  may  be  called  the  legitimate  Savings 
Bank  depositors  is  a  point  to  which  I  desire  to  call  your 
attention. 

I  have  heard  some  hard  things  said  in  this  room  about 
the  injustice  of  the  franchise  tax,  and  I  remember  that 
at  the  last  meeting  of  this  Association,  at  which  we  were 
privileged  to  have  with  us  my  friend  the  late  John  Harsen 
Rhoades,  of  hearing  Mr.  Rhoades  tell  us  that,  in  his  opin- 
ion, the  franchise  tax  is,  from  the  standpoint  of  the 
citizen,  an  absolutely  just  tax,  and  I  most  heartily  agreed 
with  Mr.  Rhoades  in  that  statement.  The  franchise  tax 
bill  was  based  on  the  assumption  that  not  less  than  thirty 
per  cent,  of  the  depositors  in  the  Savings  Banks  of  the 
State  were  people  who  had  reached  a  plane  of  prosperity 
which  justly  demanded  their  sharing  the  burden  of  the 
State's  expenses,  and  while  I  agree  with  Mr.  Rhoades's 
statement  that  this  tax  is  a  just  one  from  the  standpoint 
of  the  citizen,  I  regretted,  as  I  know  he  did,  that  seventy 
per  cent,  of  our  depositors,  who  should  not  be  discouraged 
in  their  attempt  to  become,  by  our  aid,  thrifty  citizens, 
were  thus  compelled  to  bear  this  burden,  and  all  because 
we  had  inadvertently  made  use  of  a  standard,  in  measuring 
the  success  of  our  work,  which  formed  no  part  of  the 
theory  upon  which  logicall}^  our  right  to  exist  as  a  bank 
is  based. 

Now,  if  it  is  true,  as  I  think  it  unquestionably  is,  that 
because  of  our  strife  to  excel  in  bigness,  without  due  re- 
gard to  our  mission,  the  franchise  tax  is  justifiable,  it 
seems  to  me  that  this  same  cause  of  offence  to  our  theory- 
has  worked  another  injustice  to  our  legitimate  depositors, 
viz.:  If  we  place  the  amount  on  deposit  in  the  Savings 
Banks  of  the  State  at,  in  round  numbers,  $1,000,000,000, 
we  find  that  thirty  per  cent,  of  that  sum  is  $300,000,000. 
Now,  our  investments  are  restricted  to  certain  clearly 
defined  classes  of  securities;  and  we  all  admit  that  there 
are  other  securities  of  a  conservative  character  quite  equal 
to  those  that  have  been  selected,  outside  our  Unes  of  re- 


448  HISTORY  OF  THE  SAVINGS  BANKS 

striction.  A  comparison  of  the  selling  value  of  one  class 
with  the  other,  during  times  of  prosperity,  will  show  how 
far  short  we  have  come  of  earning  all  that  we  might  have 
earned  for  our  legitimate  depositors,  had  we  restricted  the 
total  number  of  our  depositors  somewhat  nearer  than  we 
have  done  to  the  class  required  by  our  theory,  for  supply 
and  demand  regulate  the  price  and  earning  power  of  our 
investments. 

Furthermore,  when  the  market  is  rapidly  declining, 
those  of  our  depositors  who  are  accepting  our  free  service 
for  their  own  convenience  rather  than  from  their  needs 
kindly  repay  us  by  making  large  withdrawals  in  order  that 
they  may  take  advantage  of  the  times,  and  make  their  owti 
investments,  and  their  action,  being  misconstrued  by  the 
legitimate  depositor  as  being  due  to  a  loss  of  confidence, 
will  frequently  cause  him  to  withdraw  his  money  also, 
with  a  result  which  is  not  infrequently  to  his  disadvantage 
and  loss.  There  is  one  other  point  I  would  like  to  make 
and  then  I  am  done.  I  heard  a  sermon  a  good  many 
years  ago  by  the  famous  Rev.  Henry  Ward  Beecher,  in 
which  the  preacher  used  words  to  this  effect:  "Men  and 
institutions  will  always  be  regarded  by  the  public  as  being 
just  what  they  look  like,"  and  then  Mr.  Beecher  pointed 
out  the  importance  of  making  a  truthful  impression  upon 
the  pubUc  mind,  relative  to  ourselves  and  our  work,  if 
we  desired  to  attain  lasting  success  in  this  world.  As  a 
matter  of  fact,  you  do  not  have  to  talk  many  mmutes 
nowadays  with  a  citizen  of  average  intelligence  to  find 
that  he  is  utterly  ignorant  of  the  fact  that  our  Savings 
Banks  differ  in  their  conception  or  organization  and  busi- 
ness methods  from  the  commercial  banks,  excepting  that 
they  are  considered  somewhat  safer;  he  does  not  know 
how  or  why,  and  he  is  very  much  surjorised  to  be  told  that 
they  have  no  stockholders;  that  the  services  of  their  trus- 
tees are  freely  given  to  the  public,  and  that  all  their  net 
earnings  accrue  to  the  sole  benefit  of  the  depositors.  And 
when  a  time  of  panic  comes,  a  time  when  the  security  of 
the  Savings  Bank  depositors  should  not  be  questioned, 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   449 

and  would  not  be  questioned  if  rightly  understood,  we 
find  that  these  institutions  share  more  or  less  with  other 
banks  the  loss  of  the  confidence  which  so  often  brings 
disaster  to  the  community. 

Why  should  such  a  state  of  things  exist?  Is  it  not  in 
a  large  measure  due  to  the  language  used  by  the  majority 
of  the  Savings  Bank  men  in  their  conversation  about  our  in- 
stitutions and  in  their  advertisements?  I  quote  from  an 
advertisement  of  a  Savings  Bank,  which  is  not  unlike  many 
I  have  seen,  and  which  reads  thus:  "Interest  at  three  and 
one  half  per  cent,  paid  (itaUcs  mine)  on  deposits  of  $3,000 
and  under."  Other  Savings  Bank  advertisements  may  not 
infringe  the  spirit  of  the  law,  as  this  one  does,  by  naming 
a  rate  of  interest,  but  to  offer  to  pay  interest  per  se  for 
deposits,  at  once,  it  seems  to  me,  aligns  the  Savings  Banks 
so  advertising,  in  the  minds  of  the  readers,  with  the  com- 
mercial banks,  which  desire  to  sell  their  services  to  the 
public  for  the  benefit  of  their  stockholders  and  not,  as  is 
the  case  with  the  Savings  Banks,  to  give  a  service  to  the 
public. 

Now,  I  am  not  theorizing.  I  have  had  the  temerity, 
during  the  past  twenty  years,  to  test  in  a  practical  manner 
the  points  to  which  I  am  directing  your  attention.  In 
regard  to  the  matter  of  discriminating  between  the  class 
for  which,  according  to  our  theory,  we  solely  exist,  and 
the  investor,  tax-dodger,  and  others  who  desire  to  use 
our  institutions  for  their  temporary  convenience.  I  have 
frequently  been  told  that  it  is  practically  impossible  to 
keep  out  the  latter. 

Well,  it  is  not  easy,  and  perhaps  it  is  impossible  to 
wholly  eliminate  the  intruder,  but  it  goes  without  saying 
that  if  we  make  no  effort  in  that  direction  we  certainly 
cannot  get  rid  of  him.  The  $3,000  limit  is  not  a  success 
in  this  regard,  as  we  have  already  shown,  but  I  have  found 
it  practically  possible  to  limit  the  number  of  that  sort  of 
depositor  by  very  simple  means. 

In  every  Savings  Bank,  when  a  new  account  is  opened, 
certain  questions  are  asked  and  recorded  for  purpose  of 


450  HISTORY  OF  THE  SAVINGS  BANKS 

identification,  and  among  these  questions  is  one  relative 
to  the  occupation  of  the  depositor.  The  answer  to  this 
question  usually  gives  the  key  to  the  situation,  and  one  or 
two  leading  questions  will  draw  out  information,  more  or 
less  voluntarily  given,  which  will  enable  us  to  class  the 
individual  without  trouble. 

In  regard  to  the  use  of  commercial  language  at  the 
counter  and  in  our  advertisements,  it  seems  to  me  that 
by  the  use  of  such  language  we  are  not  only  inviting  the 
class  of  persons  to  become  depositors  who  are  not  con- 
templated by  our  theory,  and  whose  presence  is  detri- 
mental to  the  best  interest  of  the  legitimate  depositor, 
but  we  are  discouraging  the  latter  from  saving  as  much 
money  as  he  would  otherwise  do  if  we  used  language 
which  would  discourage  unnecessary  withdrawals. 

Let  me  give  you  from  personal  experience  an  example 
of  what  I  mean.  When  I  have  explained  to  a  depositor 
that  his  interest  had  been  deposited  to  his  credit,  and  had 
become  a  part  of  his  interest-earning  principal,  in  more 
than  one  instance  the  reply  has  been:  "Then  I  don't  want 
it;  I  thought  I  had  to  draw  it  to  get  it;  I  don't  need  it 
now." 

It  has  not  been  my  purpose,  as  I  said  in  the  beginning 
of  my  remarks,  to  do  more  than  to  indicate,  for  your  con- 
sideration, certain  points  in  practice  which  I  think  are 
working  against  the  successful  achievement  of  the  pur- 
pose for  which  our  institutions  have  been  established. 

I  ask  you  to  think  well  of  what  I  have  said,  and  not 
too  hastily  put  aside  the  points  I  have  tried  to  make,  for  I 
believe  that  the  time  is  not  far  distant  when  their  impor- 
tance will  be  forced  upon  us,  as  has  recently  been  the  case 
with  the  principle  involved  in  the  amortization  of  our 
security  values;  a  principle  long  recognized  by  a  few,  but 
very  slowly  by  many,  and  I  fear  not  yet  fully  by  the 
majority. 

Mr.  Stevens:  I  hesitate  to  say  a  word  because  there 
are  so  many  gentlemen  here  of  riper  years  who  have  had 
more  experience  in  Savings  Banks,  although  as  a  practical 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   451 

worker  in  such  institutions  I  have  had  considerable  ex- 
perience. It  does  seem  to  me  that  the  paper  read  by 
Mr.  Rhoades  deserves  the  thanks  of  the  Association,  and 
I  believe  it  represents  to  a  considerable  extent  the  feeling 
of  many  Savings  Bank  officers  and  trustees  throughout 
the  State  in  its  treatment  of  the  question  of  the  amortiza- 
tion of  bond  investments.  This  question  appeals  to  me  so 
strongly  that  I  feel  obhged  to  say  before  the  Association 
something  in  regard  to  the  matter.  The  principle  of 
amortization  undoubtedly  must  be  followed  to  get  at  the 
earning  capacity  of  a  Savings  Bank,  but  it  would  be  mani- 
festly unfair  and  unwise  to  compel  banks  which  have  suc- 
ceeded in  reducing  the  book  and  market  value  of  their 
bond  investments  to  present  market  values,  thereby 
marking  off  much  more  than  enough  to  properly  amortize 
their  investments,  to  reinstate  these  bonds  on  an  invest- 
ment basis  of  many  years  ago,  which  was  largely  artificial 
and  wiU  probably  never  return. 

I  think  that  there  are  many  Savings  Bank  men  present 
who  agree  with  me;  and,  hearing,  as  we  have,  from  a  gen- 
tleman who  has  had  large  experience  in  bond  investments 
and  who  has  placed  tliis  matter  so  forcibly  before  us,  it  is 
a  question  which  deserves  our  careful  thought. 

Mr.  Maynard:  May  I  say  a  word  on  what  the  gentle- 
man has  just  said?  I  beUeve  there  is  a  verj^  strong 
sentiment  among  members  of  this  Association  against  the 
Savings  Bank  taking  the  amortized  value  of  its  securities. 
We  all  agree  that  it  is  a  proper  bookkeeping  method  to 
arrive  at  the  actual  earning  capacity  of  the  bank.  The 
Brooklyn  Savings  Bank,  of  which  I  am  an  officer,  has  an 
actual  surplus  on  market  value  at  the  present  time  of 
about  the  sum  of  $4,300,000.  We  wiU  be  compelled  to 
report  to  the  department  on  the  amortized  value  that 
we  have  a  surplus  to-day  of  $6,000,000.  We  could  not 
realize  that  sum  if  we  sold  our  bonds.  We  simply  are 
misleading  the  public,  if  those  figures  get  to  them,  and 
they  will  through  the  department,  because  those  figures 
are  published  and  commented  on  in  the  press  annually. 


452  HISTORY  OF  THE  SAVINGS  BANKS 

As  has  just  been  called  to  my  attention  by  Mr.  Felsinger, 
New  York  Central  bonds  have  been  purchased  by  us  at 
as  high  as  113,  and  to  my  knowledge  as  high  as  no.  They 
can  be  bought  at  89  to-day.  Are  we  to  put  those  in  our 
statement  as  to  what  we  actually  own  at  no  or  113?  Now 
it  seems  to  me  that  the  only  real  object  of  making  the 
report  is  to  state  to  the  department  and  the  pubUc  the 
actual  condition  and  the  soundness  of  the  institution. 
Therefore,  I  say  that  it  is  highly  improper  from  a  business 
standpoint  for  us  to  state  that  we  have  a  surplus  of 
$6,000,000,  when  if  we  sold  the  stock,  we  could  only  get 
$4,300,000  for  it. 

Mr.  Stevens:  May  I  be  heard  once  more?  We  have 
with  us  to-day  a  gentleman  (Mr.  Rhoades)  who  I  beUeve 
can  give  information  to  any  of  the  Savings  Bank  men 
present  who  have  any  uncertainty  in  their  minds  in  re- 
gard to  this  matter,  and  also  the  Superintendent  of 
Banks,  who  can  hear  expressions  from  a  great  many  Savings 
Bank  men  on  a  matter  of  such  vital  importance. 

Amortization  based  on  the  original  extremely  high  pur- 
chase prices,  existing  from  one  to  fifteen  years  ago  on 
bonds  running  fifty  or  more  years  into  the  future,  would 
largely  over-value  the  assets,  increase  the  surplus,  and 
decrease  the  earning  capacity  of  the  institution.  It  would 
place  the  banks  on  an  inflated  and  unfair  basis  which 
would  not  truly  represent  the  present  actual  conditions  of 
the  banks  or  prices  of  their  securities — it  would  deceive 
the  depositors  and  public  generally,  compelling  the  offi- 
cers to  swear  to  a  valuation  of  assets  perhaps  in  accordance 
with  law  but  inaccurate  as  to  present  actual  conditions. 
I  know  a  Savings  Bank  that  holds  $100,000  Chicago  & 
Alton  Railroad  three  per  cent,  bonds  for  which  they  paid 
9of ;  that  is  $100,000  bonds  at  par  that  cost  $90,500.  That 
bank  has  written  the  bonds  down  on  its  books  to  $82,000, 
and  can  sell  them  to-day  for  about  $75,000.  A  scientific 
amortization  of  the  bonds  would  compel  the  bank  to  in- 
crease their  value  on  its  books  roughl}'  $200  a  year.  Ac- 
tually the  bonds  have  gone  down  thousands  of  dollars. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    453 

It  seems  to  me  inevitably  true  that  the  present  market 
value  of  our  securities  is  the  only  reliable  test  of  a  bank's 
solvency,  and  that  it  cannot  be  otherwise. 

Mr.  Coombs:  The  idea  of  estimating  the  value  of  our 
securities  upon  the  amortization  basis  has  its  origin  in 
the  hypothesis  that  all  of  the  investments  in  bonds  are 
permanent,  and  that  they  will  be  held  by  the  institutions 
until  maturity.  It  also  assumes  that  our  deposits  are 
permanent,  or,  in  other  words,  that  we  accept  the  deposits, 
invest  them,  pay  over  the  interest  as  earned  to  the  depos- 
itors, and  the  principal  at  the  maturity  of  the  bonds  in 
which  they  are  invested.  If  this  were  true  it  would  very 
much  simphfy  the  work  of  the  institutions. 

Unfortunately  many  of  us  have  during  the  past  four 
months  realized  that  deposits  are  far  from  permanent,  and 
that  such  bonds  as  have  been  sold  to  meet  drafts  have 
been  worth  their  market  value.  If  the  withdrawals  had 
continued,  resulting  in  the  liquidation  of  the  banks,  our 
ability  to  pay  would  have  depended  upon  the  price  at 
which  we  could  market  our  securities.  The  provision  en- 
abling us  to  require  notices  of  withdrawals,  which  is  a 
perfectly  proper  one,  would  probably  extend  the  period 
for  Hquidation  for  a  year  or  more. 

I  appreciate  the  injustice  to  the  institutions  in  the  re- 
quirement that  the  values  should  be  stated  as  those  existing 
on  the  first  day  of  July  and  the  first  day  of  January,  at  which 
periods,  for  various  reasons,  the  conditions  of  the  bond 
markets  are  abnormal.  If  it  was  provided  that  the  prices 
should  be  based  upon  the  average  price  during  the  pre- 
ceding six  months  it  would  be  much  fairer  and  safer. 
The  law  requiring  us  to  give  the  amortization  values  has 
been  passed,  and  wiU  be  observed,  but  I  insist  that  at  the 
same  time  the  reports  should  contain  a  statement  of  the 
market  values.  The  remark  of  Mr.  Maynard,  of  the 
Brooklyn  Savings  Bank,  that  under  the  amortization 
plan  their  surplus  would  be  increased  from  $4,000,000  at 
market  value  to  $6,000,000,  as  well  as  the  calculation 
made  by  the  cashier  of  the  South  Brooklyn  Savings  Insti- 


454  HISTORY  OF  THE  SAVINGS  BANKS 

tuticn,  that  our  surplus  of  $1,848,919  at  market  value 
would  be  increased  to  $2,800,000,  seem  to  me  to  be  un- 
answerable arguments.  We  cannot  afford,  on  account 
of  the  unfortunate  conditions  that  have  prevailed  during 
the  last  year,  to  adopt  policies  that  lead  to  an  over- 
estimate of  our  strength.  The  fact  that  during  the  period 
of  stress  every  Savings  Bank  in  the  State  has  been  able  to 
meet  its  obligations  is  proof  that  they  do  not  need  any 
artificial  props  to  insure  their  solvency. 

Note:  Mr.  Wm.  F.  Patterson  was  elected  Secretary 
of  the  Association  in  1908  to  succeed  Mr.  Wm.  G.  Conklin, 
who  had  declined  a  reelection;  in  the  following  year 
Mr.  Jonathan  B.  Currey  was  chosen  to  that  office,  and  in 
1910  Mr.  Frederic  B.  Stevens  became  Secretary. 


CHAPTER  XVI 


Sixteenth  Annual  Convention — Address  of  President  Miller — 
Election  of  Mr.  Thomas  F.  Mulry,  of  the  Emigrant  Industrial 
Savings  Bank,  New  York,  as  President — Addresses  by  Edgar 
J.  Levey,  John  A.  Johnson,  President  of  the  Savings  Bank 
Section  of  the  American  Bankers'  Association;  Clark  Williams, 
Superintendent  of  the  Banking  Department,  and  Mr.  E.  P. 
Mavnard. 


T 


HE  Sixteenth  Annual  Convention  was  called  to 
order  in  the  rooms  of  the  Chamber  of  Commerce, 
New  York  City,  on  Thursday,  May  27,  1909. 


ADDRESS    OF   PRESIDENT    MILLER 


In  opening  the  proceedings  of  the  Convention,  Mr. 
Miller  said: 

Fifteen  years  ago,  when  we  held  our  first  annual  meet- 
ing, the  Savings  Banks  of  New  York  State  had  in  their 
care  deposits  amounting  to  $17,089,448.98.  To-day  the 
amount  due  on  deposits  is  $1,396,443,327.78.  We  could 
congratulate  ourselves  unreservedly  on  these  figures  as 
showing  a  healthy  growth  if  these  increased  deposits 
represented  altogether  the  savings  of  the  thrifty  poor. 
That  this  is  not  entirely  the  case,  we  who  know  actual 
Savings  Bank  conditions  do  not  need  to  be  told.  During 
these  fifteen  years  the  average  size  of  our  accounts  has 
risen  from  $389  to  $510,  and  while  part  of  this  increase  is 
due  to  the  constant  addition  of  dividends  to  accounts 
which  are  otherwise  undisturbed,  we  all  know  that  part 
of  it  is  due  to  the  deposits  with  us — especially  during 
periods  of  cheap  money' — of  funds  which  are  in  no  sense 
savings,  by  persons  who  ought  not  to  be  Savings  Bank 

4SS 


456  HISTORY  OF  THE  SAVINGS  BANKS 

depositors.  Perhaps  the  heavy  withdrawals  which  ac- 
companied and  followed  the  panic  have  had  a  tendency 
to  make  us  welcome  new  deposits,  no  matter  what  their 
source.  Still,  even  in  that  connection,  it  is  worth  while 
to  consider  whether  the  large  deposits  which  represent 
investment  rather  than  savings  are  not  a  source  of  weak- 
ness rather  than  of  strength  in  any  period  of  stress.  I 
hope  that  some  day  this  Association  may  undertake  the 
task  of  devising  a  plan  to  keep  out  undesirable  accounts. 
Its  ultimate  failure  to  do  so,  will  result,  I  fear,  in  the  task 
being  undertaken  by  the  Legislature. 

The  Mutual  Savings  Bank  differs  fundamentally  from 
every  other  business  enterprise.  The  underlying  principle 
of  all  business  is,  in  a  way,  selfish.  The  directors  of  rail- 
roads and  banks  and  manufacturing  enterprises  are  all 
financially  interested  in  the  success  or  failure  of  the  busi- 
ness which  they  direct.  Usually  they  represent  a  large 
portion  of  the  capital  invested.  Even  in  the  case  of  mut- 
ual life  insurance  companies,  the  trustees  are  policy  holders, 
and  have  to  that  extent  the  same  financial  interest  as  the 
other  policy  holders. 

In  the  management  of  a  Mutual  Savings  Bank,  however, 
selfishness  or  self-interest  has,  theoretically,  at  least,  no 
place.  Our  trustees  cannot  be  depositors.  They  cannot 
borrow  of  the  bank.  For  nearly  a  century  we  have  been 
giving  a  practical  demonstration  of  altruism  in  business,  and 
I  think  we  may  safely  claim  to  have  proved  that  unselfish- 
ness can  go  hand  in  hand  with  good  business  management. 

So  far  as  we  continue  true  to  our  ideal,  so  far  as  we 
think  only  of  the  good  of  classes  in  our  community  which 
we  were  created  to  serve,  so  far  will  our  success  continue. 
The  moment,  however,  when  we  managers  of  Savings 
Banks  begin  to  consider,  consciously  or  unconsciously,  our 
owTi  interest,  then  danger  to  the  whole  system  will  arise. 
Conscious  self-seeking  among  us  is  unlikely  to  be  trouble- 
some. I  suppose  none  of  us  to-day  would  be  influenced 
by  personal  consideration  in  selecting  investments  or  in 
designating  depositories  for  our  funds. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   457 

Unconscious  selfishness,  however,  is  vcrv'  insidious,  and 
doubly  dangerous.  The  desire  for  legitimate  growth  is 
proper.  Each  of  us  wishes  to  do  his  full  duty  in  the  com- 
munity. If  those  who  have  never  saved  can  be  induced  to 
begin,  if  those  who  saved  little  can  be  persuaded  to  save 
more,  the  result  is  beneficial  to  them  and  the  community, 
and  the  resulting  increase  in  deposits  a  matter  of  proper 
congratulation. 

Every  other  increase  is  undesirable,  and  if  we  strive  for 
it,  if  we  compete  for  investment  deposits  by  too  high  in- 
terest rates,  or  by  undue  advertisement,  we  are  actuated, 
consciously  or  unconsciously,  by  selfish  motives.  The 
pride  which  makes  us  wish  to  outstrip  our  neighbors  in 
size  is  essentially  selfish.  It  may  be  proper  to  use  the 
money  of  our  frugal  depositors  to  teach  and  induce  others 
to  save,  but  to  use  it  to  attract  the  idle  funds  of  persons 
of  wealth  cannot  benefit  those  to  whom  it  belongs,  and 
if  the  result  gratifies  our  selfish  pride,  it  does  so  at  the 
expense  of  our  usefulness  as  instruments  for  good. 

Competition  is  the  life  of  trade  where  trade  depends  on 
selfishness  as  a  motive  force,  but  competition  is  out  of 
place  when  the  motive  force  is  altruistic.  In  my  opinion 
the  greatest  service  which  could  be  done  to  the  Savings 
Banks  of  this  State  would  be  to  awaken  their  officers  and 
trustees  to  a  consciousness  of  the  essential  solidarity  of 
the  Savings  Banks  system;  to  make  them  realize  that  we 
are  not  one  hundred  and  thirty-eight  institutions,  any 
one  of  which  may  gain  at  the  expense  of  the  others,  but 
really  one  hundred  and  thirty-eight  branches  of  the  same 
institution  inseparably  bound  up  by  a  community  of  in- 
terests and  of  motives,  so  that  the  gain  of  one  is  the  gain 
all. 

I  feel  it  my  duty  to  call  the  attention  of  the  Association 
to  the  proposed  amendments  to  the  Constitution  of  the 
State,  the  adoption  of  which  will  result  in  a  considerable 
extension  of  the  debt  limit,  not  only  for  New  York  City, 
but  for  the  cities  of  the  third  class  as  well.  Unless  vigor- 
ous opposition  manifests  itself,  gentlemen,  this  amend- 


458  HISTORY  OF  THE  SAVINGS  BANKS 

ment  will  go  by  default.  To  my  mind  no  class  in  the 
community  is  more  interested  in  the  defeat  of  this  project 
than  the  depositors  in  our  Savings  Banks.  We  invested  in 
New  York  State  municipal  securities  with  a  distinct  un- 
derstanding of  the  constitutional  limits  placed  upon  the 
municipal  debt.  Those  limits  were  already  distinctly  more 
liberal  than  was  considered  safe  in  the  cities  outside 
of  the  State,  as  the  legislation  restricting  our  investments 
in  foreign  municipal  bonds  shows.  To  extend  these  limits 
further,  and  permit  a  much  larger  debt  than  we  counted 
on  when  we  made  our  investments,  is,  to  my  mind,  very 
like  a  breach  of  faith.  While  such  a  course  may  not,  and 
probably  will  not,  result  in  a  failure  to  pay  the  principal 
and  interest  on  our  city  bonds,  it  must  result  in  a  depre- 
ciation in  their  market  value  which  we  ought  not  to  be 
called  on  to  face. 

In  conclusion,  gentlemen,  I  wdsh  to  express  to  this  Asso- 
ciation, and  to  you  my  colleagues,  so  much  as  I  can  express, 
my  gratitude  for  the  high  honor  which  you  did  me  a  year 
ago — an  honor  far  exceeding  any  other  which  has  ever 
come  to  me — and  to  pledge  to  you  that  the  expiration  of 
my  term  of  ofhce  will  not  diminish  my  interest  in  this 
Association  nor  my  work  in  its  behalf. 

The  President-elect,  Thomas  M.  Mulry,  of  the  Emigrant 
Industrial  Savings  Bank,  New  York,  was  then  escorted  to 
the  platform.     He  said: 

Fellow-members  of  the  Savings  Banks  Association  of 
the  State  of  New  York:  Like  the  retiring  President, 
I  feel  this  is  the  greatest  honor  which  has  ever  been 
accorded  to  me;  and,  while  I  appreciate  the  honor  very 
much  indeed,  I  also  appreciate  the  fact  that  it  is  not 
meant  to  be  personal  to  me,  but  as  an  acknowledgment 
of  the  high  standing  of  the  institution  over  which  I  have 
the  honor  to  preside. 

I  also  think,  with  our  retiring  President,  that  there  is 
enough  presidential  timber  in  this  room  to  go  around,  and 


PRESIDENT,  IQOg 


THOMAS  M.  MULRY 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   459 

I  believe  he  has  established  a  very  wise  precedent  when  he 
has  insisted  on  only  serving  one  term.  Before  having  a 
second  term  offered  to  me,  I  mean  to  tell  you  now  that  I 
will  be  satisfied  with  one  term,  and  will  only  take  one 
term. 

I  do  not  intend  to  say  very  much,  because  I  believe  that 
the  time  for  a  man  to  do  his  talking  is  when  he  is  leaving 
office,  so  there  will  be  nobody  to  come  back  at  him  after- 
ward. 

At  a  meeting  of  the  Executive  Committee  held  March 
18,  1909,  Mr.  William  P.  Sturges,  President  of  the  Dime 
Savings  Bank  of  Williamsburgh,  was  elected  to  the  Execu- 
tive Committee  to  fill  the  vacancy  caused  by  the  death  of 
General  Meserole. 

ADDRESS   OF  MR.    EDGAR  J.   LEVEY 

Mr.  President  and  Gentlemen  of  the  New  York  Savings 
Banks  Association:  The  Savings  Banks  of  the  State  of 
New  York  own  nearly  $150,000,000  of  New  York  City 
bonds.  This  represents  just  about  one  fourth  of  the 
city's  net  funded  debt.  It  also  represents  nearly  one 
tenth  of  the  total  assets  of  the  Savings  Banks.  No  other 
creditor  class  holds  anything  like  so  large  an  amount  of 
the  city's  obligations,  and,  with  the  exception  of  real- 
estate  mortgages,  no  other  one  class  of  security  is  held 
by  the  Savings  Banks  to  anything  like  the  same  extent. 
The  relation  of  debtor  and  creditor  between  New  York 
City  and  the  Savings  Banks  is  therefore  one  of  unusual 
intimacy  and  importance,  and  neither  party  to  this  rela- 
tion can  afford  to  remain  indifferent  to  the  attitude  and 
the  policies  of  the  other.  If  the  credit  of  New  York  City 
should  become  seriously  impaired,  and  the  market  value  of 
its  bonds  should  continue  to  decline,  such  a  misfortune 
would  materially  affect  the  financial  condition  of  Savings 
Banks.  And,  on  the  other  hand,  should  the  Savings  Banks, 
from  motives  of  prudence,  decide  in  the  future  not  to  be- 


46o  HISTORY  OF  THE  SAVINGS  BANKS 

come  purchasers  of  city  bonds,  or  to  purchase  them  in 
much  smaller  quantity  than  in  the  past,  the  deprivation 
or  restriction  of  the  city's  best  market  for  its  bonds  would 
influence  its  fiscal  operations  in  no  small  degree. 

It  is  only  within  recent  years  that  any  serious  discussion 
has  been  heard  concerning  the  intrinsic  merits  of  New 
York  City's  bonded  obligations.  Previously,  their  merits 
had  always  been  taken  for  granted.  With  a  hmited  out- 
put and  a  constant  demand,  these  bonds  far  outranked 
in  popularity  and  in  price  the  most  gilt-edged  railroad 
bonds,  and  their  fluctuations  were  mainly  a  reflection  of 
the  ease  or  scarcity  of  money.  More  recently,  however, 
a  greatly  increased  supply  has  been  coincident  with  a  re- 
duced demand,  due  partly  to  the  legislation  enlarging  the 
scope  of  Savings  Bank  investments,  and  partly  to  a 
change  in  the  method  of  raising  State  revenue,  which 
rendered  these  bonds  no  longer  available  to  trust  com- 
panies as  a  tax-exempt  security.  Omng  to  these  and  to 
other  causes,  to  which  brief  reference  will  be  made.  New 
York  City  bonds  have  depreciated  enormously.  In  order 
to  measure  the  full  extent  of  this  depreciation,  it  is  not 
necessary  to  go  back  more  than  twenty  years.  In  1889 
New  York  City  sold  about  nine  millions  of  dollars  of  two 
and  a  half  per  cent,  twenty  to  forty  year  consolidated 
stock  at  prices  ranging  from  par  to  loi  J.  This  represented 
the  high-water  mark  of  New  York  City's  credit.  In 
1907  the  low-water  mark  was  reached,  when  four  and  a 
half  fifty  year  bonds  sold  at  a  shade  over  102,  or  on  a  4.39 
per  cent,  interest  basis.  By  coordinating  and  comparing 
these  two  sales,  it  would  be  found  that  the  price  which  the 
city  was  made  to  pay  for  the  use  of  money  had  increased 
in  the  interim  about  seventy-seven  per  cent.  An  examina- 
tion of  the  prices  reaUzed  by  the  city  for  its  bonds  in  the  last 
twenty  years  shows  that  the  depreciation  has  been  gradual, 
but  substantially  constant.  It  is  true  that  depreciation 
in  the  value  of  municipal  bonds  has  been  a  world-wide 
phenomenon;  but  in  the  case  of  New  York  City  this 
movement  has  acquired  a  peculiar  significance  because 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   461 

of  the  fact  that  whereas  in  former  years  the  bonds  of  the 
metropoHs  commanded  a  higher  premium  than  those  of 
any  other  city  in  America,  this  distinction  has  not  been 
wholly  lost.  In  fact,  it  is  not  only  the  bonds  of  other 
large  cities,  like  Philadelphia,  Baltimore,  Cincinnati,  Min- 
neapolis, and  Buffalo,  which  are  sold  on  measurably  better 
terms  than  those  of  New  York,  but  the  same  is  also  true  of 
many  smaU  towns  and  villages. 

Conditions  affecting  the  price  of  city  bonds — conditions 
of  aU  kinds — market  or  natural  conditions,  legislative  or 
artificial  conditions,  and  political  or  sentimental  condi- 
tions— are  so  different  now  from  what  they  were  twenty 
years  ago  that  the  comparison  with  the  sales  of  1889  pos- 
sesses httle  more  than  historical  interest.  The  practical 
banker  of  to-day  is  more  concerned  about  the  future  of 
New  York  City's  credit  than  its  past.  And  as  to  the  fu- 
ture, there  are  in  plain  sight  to-day  influences  which  to  the 
thoughtful  are  disquieting.  It  is  not  that  any  holder  of 
New  York  City  bonds  has  cause  to-day  to  fear  the  loss  of 
either  principal  or  interest  if  he  holds  his  bonds  to  matur- 
ity. Such  a  possibility  is  entirely  too  remote  for  serious 
consideration.  But  ad  interim  marketability  is  a  factor 
which  influences  most  investors,  and  even  where  invest- 
ment is  of  such  a  permanent  character  as  it  is  with  the  Sav- 
ings Banks,  the  element  of  marketability  and  marketable 
prices  cannot  be  ignored .  The  student  of  municipal  finance , 
undertaking  an  inquiry  into  the  causes  of  the  decline  in 
New  York  City's  credit,  as  measured  by  the  selling  price  of 
its  bonds,  would  first  be  struck  by  the  abnormal  increase 
in  the  city's  debt  in  recent  years.  On  January  i,  1898,  the 
date  of  consohdation,  the  net  funded  debt  of  the  city  was 
$232,248,785.89.  On  May  i,  1909,  the  net  funded  debt 
was  $603,187,850.87.  During  the  ten  years  preceding  con- 
solidation the  average  annual  issues  of  consolidated  stock 
were  $12,289,480,  which,  with  an  average  population  of 
1,750,010,  amounted  to  $6.99  per  capita.  The  average 
annual  issues  of  corporate  stock  since  consolidation  have 
been  $45,150,907,  or  $11.94  per  capita.     These  figures 


462  HISTORY  OF  THE  SAVINGS  BANKS 

are  impressive,  but  not  necessarily  alarming.  Every  intel- 
ligent observer  knew  that  consolidation  would  inevitably 
bring  about  some  such  result,  and  if  the  extent  of  the 
increase  of  the  city's  indebtedness  has  somewhat  out- 
run expectations,  there  is  still  no  question  about  the  city's 
ability  to  care  for  its  existing  indebtedness.  The  really 
disquieting  feature  in  the  present  situation  is  the  proof 
which  is  to  be  found  on  every  side  that  the  city's  recent 
financial  excesses  have  superinduced  a  flippant  attitude 
of  irresponsibility  on  the  part  of  the  public  and  a  large 
part  of  the  pubHc  press  toward  the  question  of  the  city's 
obligations.  The  constitutional  amendment  enlarging  the 
city's  debt  limit,  which  is  to  be  voted  on  by  the  people 
next  fall,  was  opposed  by  the  Chamber  of  Commerce 
with  practical  unanimity,  and  for  reasons  which  appealed 
to  the  common  sense  of  every  conservative  man.  It  sub- 
sequently passed  the  Assembly  by  a  vote  of  126  to  13, 
largely,  if  not  mainly,  because  of  a  skilful  appeal  to  prej- 
udice made  on  the  ground  that  its  passage  would  strike 
a  blow  at  the  so-called  "traction  interest."  It  seems 
likely  to  be  adopted  next  fall  by  a  popular  vote  in  some- 
what similar  ratio  to  the  New  York  City  majority, 
for  it  will  probably  be  obtained  by  creating  a  vague  im- 
pression in  the  minds  of  many  voters  that  its  adoption 
means  "sending  the  traction  thieves  to  jail,"  or  restoring 
transfer  privileges  on  the  surface  railroads,  or  providing 
free  rides  on  some  new  municipal  subway. 

Few  realize  the  extent  to  which  the  constitutional  bar- 
rier to  excessive  municipal  debt  has  been  weakened  in 
recent  years.  Soon  after  consolidation  the  Constitution 
was  amended  so  that  the  counties  comprised  within  the 
territorial  limits  of  the  City  of  New  York  should  not  be 
counted  in  estimating  the  city's  debt.  Under  this  pro- 
vision every  twenty-one  million  dollars  of  county  debt — 
which  is,  of  course,  a  debt  of  every  citizen  of  New  York 
City — is  now  excluded.  In  1903  the  law  regulating  the 
city  sinking  funds  was  amended  so  as  to  bring  about  a 
reduction  in  the  provision  made  for  the  redemption  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   463 

the  city  debt,  which  now  amounts  to  about  $15,000,000 
annually.  In  itself,  this  amendment  to  the  law  was  jus- 
tified; but  taken  in  connection  with  the  breaking  down 
of  the  constitutional  barrier,  it  has  helped  to  accentuate 
the  growing  weakness  of  the  city's  financial  position. 

By  the  constitutional  amendment  which  took  effect  on 
January  i,  1906,  all  indebtedness  incurred  by  the  city  for 
water  purposes  subsequent  to  January  i,  1904,  was  simi- 
larly excluded.  Under  this  provision  about  $40,000,000 
of  water  bonds  are  now  excluded  in  computing  the  city's 
debt  limit,  and  the  enormous  bond  issues  which  the  city 
will  have  to  make  for  the  new  Catskill  water  supply  will  be 
— for  constitutional  purposes — as  though  they  did  not 
exist.  But  for  every  practical  purpose,  this  new  forth- 
coming water  debt  will  produce  its  full  effect  upon  the 
finances  of  the  city.  These  bonds  will  have  to  find  pur- 
chasers, and  the  principal  and  interest  of  them  wiU  have 
to  be  raised  by  taxation.  And  now  it  is  proposed  to  ex- 
clude from  constitutional  computation  additional  classes 
of  city  bonds,  presumably  to  the  end  that  the  city  may 
build  subways  of  such  an  impracticable  and  unprofitable 
character  that  private  capital  cannot  be  induced  to  touch 
them. 

The  flippancy  with  which  the  constitutional  debt  limit  is 
treated  by  a  part  of  the  press  leads  me  to  wonder  why  it 
was  ever  incorporated  in  the  Constitution.  If  it  is  not  to 
be  allowed  to  operate  when  the  shoe  pinches,  of  what  use 
is  it?  At  other  times  it  is  unnecessary;  and  it  would  seem 
that  at  the  very  time  when  its  provisions  can  take  effect 
and  become  of  practical  value,  then  it  must  be  stretched — 
and  restretched  again,  as  often  as  new  opportunities  arise. 

It  has  now  become  quite  a  commonplace  remark  that 
the  present  is  an  age  of  social  unrest.  One  of  the  most 
seductive,  and  therefore  one  of  the  most  dangerous,  politi- 
cal movements  of  the  day  is  that  which  passes  under  the 
name  of  municipal  socialism.  This  movement,  by  the 
alluring  promises  which  it  holds  forth  of  improving  social 
conditions,  has  enlisted  the  support  of  many  philantliro- 


464  HISTORY  OF  THE  SAVINGS  BANKS 

pists  and  well-meaning  reformers.  There  are  also  others, 
whose  past  records  have  not  been  so  distinguished  by 
altruism,  who  have  been  attracted  to  municipal  socialism 
because  of  the  obvious  advantages  which  it  affords  of  be- 
coming charitable  and  public-spirited  with  other  people's 
money.  Its  real  political  strength  lies,  of  course,  in  its 
menace  to  property  rights  and  in  its  promise  of  giving  to 
one  man  the  fruit  of  another's  toil;  but  this  menace  and 
this  promise  are  concealed  beneath  a  smDing  and  benevo- 
lent mask  of  humanitarianism.  Of  the  many  aspects  of 
this  movement,  there  is  only  one  to  which  I  wish  now  to 
call  your  attention,  and  that  is  this:  municipal  sociaUsm 
involves  public  expenditures  on  a  scale  so  vast  as  to  make 
the  budgets  of  the  past  seem  insignificant  in  comparison. 
These  gigantic  expenditures  mean  either  a  crushing  bur- 
den of  taxation,  felt  immediately  by  incorporation  in  cur- 
rent tax  levies,  or  postponed  in  part  by  public  borrow- 
ings. The  latter  is  the  method  sure  to  be  preferred  by 
municipal  sociaUzers;  because  higher  tax  bills  spell  higher 
rents ;  and,  slow  as  the  average  rentpayer  is  to  appreciate 
that  he  does  pay  taxes  in  the  shape  of  rent,  sooner  or 
later  the  truth  is  apt  to  dawn  upon  him  that  there  is 
no  profit  in  a  man's  trying  to  lift  himself  up  by  his  own 
boot-straps.  But  in  the  case  of  public  borrowing  the  evil 
day  of  reckoning  is  postponed.  The  voters  of  New  York 
City  think  very  little  of  the  loss  of  a  million  dollars  a 
year  in  operating  the  municipal  ferries,  because  the  loss 
does  not  appear  in  the  budgets,  but  is  concealed  in  the 
bond  transaction  of  the  Dock  Department.  And  in  like 
manner  those  gentlemen  who  insist  that  our  future  sub- 
way construction  should  be  undertaken  solely  with  a  view 
of  its  social  consequences — such  as  a  pre-planned  distri- 
bution of  our  congested  population — and  not  at  all  from 
the  standpoint  of  profitable  or  self-supporting  operation — 
these  gentlemen  count  upon  concealing  the  economic  effect 
of  their  social  experiments  by  a  profligate  use  of  the  city's 
credit. 

But  in  one  sense  these  gentlemen  are  counting  without 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   465 

their  host.  The  sale  of  city  bonds  imphes  buyers  for 
them ;  and  the  question  of  price  is  also  involved.  The 
attractiveness  of  utilizing  the  city's  credit  when  the  inter- 
est rate  on  its  obligations  was  two  and  one  half  per  cent, 
is  diminished  when  that  rate  becomes  four  per  cent.,  and 
as  that  rate  continues  to  rise,  the  popularity  of  its  use — 
or  rather  abuse — will  decline  correspondingly.  How  will 
you  gentlemen  controlhng  the  Savings  Banks  of  this  State 
regard  a  doubling,  or  a  trebling,  of  the  city's  debt?  Is 
it  not  true  that  the  excesses  of  municipal  socialism  are 
likely  to  be  regulated  and  controlled  to  no  smaU  extent 
by  the  increasing  unwiUingness  of  investors  to  buy  munic- 
ipal bonds? 

So  much  nonsense  has  been  spoken  and  written  on  this 
subject  in  the  last  year  that  it  is  a  special  pleasure  to  be 
able  to  call  attention  to  a  remarkably  able  series  of  edito- 
rials which  have  recently  appeared  in  the  New  York  Times 
on  this  subject  of  the  city's  credit.  In  one  of  these  edito- 
rials the  writer,  answering  the  question,  why  the  city's 
credit  is  suffering,  says:  "The  reason  plainly  is  that  the 
city  is  not  a  good  moral  risk,  in  the  language  of  the  in- 
surance companies.  It  is  demeaning  itself  in  a  manner 
which  would  cut  off  the  credit  of  any  borrower  at  a  bank. 
The  city's  credit  has  not  yet  been  stopped,  it  has  merely 
reached  the  stage  where  lenders  are  in  effect  saying  to  it, 
as  an  old  bank  officer  once  said  to  an  impetuous  borrower: 
'  You  wiU  get  yourself  into  trouble,  young  man,  some  day, 
if  you  sign  your  name  so  easily  as  that.'  The  city  is  sign- 
ing its  name  too  easily,  and  is  proving  that  it  is  doing  so  by 
the  mental,  as  weU  as  moral,  attitude  it  assumes  toward 
the  assumption  of  its  obligations." 

And  then,  referring  to  the  passage  of  the  constitutional 
amendment,  the  writer  proceeds  to  ask : — m  regard  to  which, 
by  the  way,  I  was  so  glad  to  hear  the  retiring  President 
refer  in  the  terms  that  he  did:  "Can  it  be  assumed  that 
the  holders  of  the  city  bonds,  the  probable  grantors  of 
the  city's  further  applications  for  accommodation,  take  a 
similar  view  of  a  movement  which  detracts  from  the  \'alue 


466  HISTORY  OF  THE  SAVINGS  BANKS 

of  every  bond  now  outstanding?  The  law  requires  only  a 
popular  vote  to  authorize  such  action,  but  ought  there 
not  to  be  some  perception  of  a  moral  obligation  to  consult 
the  holder  of  outstanding  bonds  which  were  taken  upon 
the  faith  of  the  limitation,  perhaps  to  be  repealed?  The 
legal  answer  to  these  questions  will  be  given  at  the  polls. 
The  financial  answer  will  be  given  in  the  private  parlors 
of  bankers,  and  in  the  thoughts  of  such  individuals  as 
buy  bonds.  Who  will  buy  a  city  bond  because  of  a  pop- 
ular majority  in  favor  of  extending  the  constitutional 
limit  upon  the  city's  borrowing  power?  The  bonds  to 
be  excepted  from  the  constitutional  limitations  remain 
outstanding  and  are  the  city's  obligations.  Every  lender 
capable  of  adding  will  combine  the  excepted  and  the  in- 
cluded bonds,  and  find  the  total  of  the  city's  financial 
burdens,  and  will  take  note  that  the  city  is  evading  a  limi- 
tation which  has  approved  its  necessity  by  the  very  fact 
that,  being  reached,  it  is  not  obeyed,  but  repealed." 


ADDRESS   BY   MR.  JOHN  A.  JOHNSON 

Mr.  John  A.  Johnson,  President  of  the  Peninsula 
Savings  Bank,  of  Detroit,  Mich.,  and  President  of  the 
Savings  Bank  Section  of  the  American  Bankers'  Associa- 
tion, addressed  the  Convention  as  follows: 

When  your  President  invited  me  to  be  with  you  to-day 
and  incidentally  hinted  that  it  would  be  in  order  for  me  to  at 
least  make  a  passing  comment  on  some  pertinent  subject, 
I  confess  to  serious  hesitation.  I  possess  none  of  the  gifts 
that  would  warrant  my  taking  the  time  of  so  prominent 
and  so  experienced  a  body,  fearing  at  best  that  I  could  not 
interest  you;  but,  on  second  thought  I  reaUzed  that  the 
invitation  was  not  extended  to  me  as  an  individual  but 
rather  as  the  President  of  the  Savings  Bank  Section  of 
the  American  Bankers'  Association,  and  this  courtesy  of 
your  favor  must  be  acknowledged.  I  am  here  to  do  this 
in  person,  and  since  the  opportunity  has  been  given,  to  in- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   467 

cidentally  beg  your  serious  consideration  of  a  question 
that  is  now  claiming  the  attention  of  our  body,  and  also 
that  of  every  thinking  and  progressive  banker. 

I  have  been  a  member  of  the  American  Bankers'  Asso- 
ciation for  a  number  of  years,  but  until  I  became  in- 
terested in  the  Savings  Bank  Section  I  was  disposed,  like 
many  of  your  members,  to  regard  the  meetings  rather  in 
the  light  of  a  pleasant  junket  with  delightful  associates 
than  as  a  weighty  business  proposition.  As  I  took  up  the 
section  work,  I  became  more  and  more  impressed  with  the 
great  task  ahead  of  us,  with  the  power  at  our  command, 
and  with  the  necessity  of  our  using  that  power  in  leading 
the  work  of  bettering  Savings  Bank  conditions,  and  not 
in  being  led  by  people  who  know  little  or  nothing  about  the 
requirements  of  the  situation.  The  first  thing  to  attract 
my  attention  was  the  lack  of  uniformity  in  Savings  Bank 
laws  and  conditions,  and  at  my  suggestion  two  years  ago  a 
Committee  was  appointed  to  investigate  the  situation  and 
report.     Up  to  date  this  is  what  they  find : 

Eighteen  States  which  have  no  Savings  Bank  laws; 
eight  States  where  stock  banks  may  be  organized  with 
separate  departments  for  commercial  and  savings  busi- 
ness ;  a  few  States,  notably  New  York  and  the  New  Eng- 
land States,  with  Trustee  Savings  Banks,  and  one  (Ohio — 
new)  providing  for  commercial,  savings,  trust,  and  safe 
deposit  business;  another,  California,  providing  for  com- 
mercial, savings,  and  trust  business;  this  latter  modeled 
in  its  most  prominent  features  after  your  own  law,  with 
a  suggestion  or  two  from  Michigan,  and  the  remainder  with 
practically  no  restrictions  or  regulations. 

While  this  investigation  was  being  made,  our  Committee 
worked  most  industriously  to  lay  the  foundation  for  im- 
provements to  follow,  and  they  feel  rather  proud  in  having 
assisted  several  States  in  some  one  of  the  several  features 
we  considered  desirable,  planting  seeds  for  the  better 
fruit  to  follow.  This  brought  us  up  to  the  second  stage 
of  our  work,  and  before  we  could  proceed  it  became  nec- 
essary to  define  what  is  a  savings  deposit.     In  the  early 


468  HISTORY  OF  THE  SAVINGS  BANKS 

days  of  your  history  you  had  no  difficulty  in  determining 
this.  Your  institutions  were  purely  philanthropic,  man- 
aged by  broad-minded  and  experienced  business  men,  who, 
as  a  civic  and  patriotic  duty,  took  upon  themselves  the 
trusteeships  of  the  provident  members  of  the  community 
who  had  neither  the  judgment  nor  the  experience  with 
which  to  invest  their  savings,  and  not  unfrequently  the 
necessary  amount  to  handle  to  advantage.  In  the  wisdom 
of  these  long-headed  predecessors  of  yours,  they  limited 
the  amount,  but  as  this  country  became  more  populated 
and  its  wealth  increased,  changed  conditions  naturally 
followed,  and  herein  Hes  the  problem  of  the  hour,  second 
not  even  to  the  currency  question.     What  do  we  find? 

According  to  figures  carefully  prepared  by  our  Secretary, 
the  total  savings  deposits  pf  the  United  States  aggregate 
$5^560,837,016,  of  which  $3,660,553,945  is  in  1,453  ex- 
clusive Savings  Banks;  $1,568,720,391  in  the  State  banks, 
Stock  Savings  Banks,  trust  companies,  and  private  banks 
(estimated  in  number  at  15,000),  and  $331,562,680  in  the 
sa\'ings  departments  of  national  banks,  to  which  in  my 
opinion  many  millions  more  could  be  added  for  time  cer- 
tificates of  deposit  that  are  clearly  savings,  to  which  as 
evidence  of  the  further  thrift  of  our  people  may  be  added 
three  quarters  of  a  billion  in  the  building  and  loan  associa- 
tions, and  hundreds  of  millions  in  the  different  life  in- 
surance companies,  both  of  which  are  not  taken  into  con- 
sideration in  this  data. 

What  should  be  done  with  this  vast  sum  belonging,  it 
is  safe  to  say,  to  probably  twenty  milhons  of  people,  and 
how  can  we  best  safeguard  their  interests?  The  Sage  of 
Lincoln  says,  "By  guaranteeing  the  deposits."  I  think 
you  will  agree  that  this  is  clearly  an  appeal  to  the  masses 
for  their  votes,  and  as  it  has  been  said,  "Not  in  the  in- 
terests of  the  people . ' '  The  Administration  insists  that  the 
Postal  Savings  Banl^  would  be  a  potent  factor  in  the  solu- 
tion, and  while  I  have  not  the  slightest  fear  of  the  competi- 
tion created  by  its  establishment,  yet  I  question  not  only 
the  desirability  but  the  practicabilit}'  of  any  plan  yet  sub- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   46Q 

mitted.  Each  of  these  questions  being  prominent  in  itself, 
I  will  pass  on  without  further  comment,  other  than  to  say 
that  we  must  meet  this  popular  cry.  The  mere  fact  that 
we  have  protested  publicly  and  otherwise  against  both 
of  these  prominent  features  is  not  sufficient  to  convince 
the  masses  of  their  undesirability.  We  must  give  them 
something  as  good  or  better,  and  prove  it  to  them.  What 
form  should  this  take? 

Naturally  you  will  say  that  there  is  but  one  proper 
depository  for  savings,  the  trustee,  or  mutual,  bank.  In 
settled  communities  like  New  York  and  New  England  this 
may  be  true,  but  in  all  sections  this  is  not  even  feasible, 
and  since  we  find  a  condition  and  not  a  theory,  it  is  our 
bounden  duty  as  bankers  and  as  citizens  of  this  great  coun- 
try to  make  the  best  of  it,  to  safeguard  in  every  possible 
way  the  trust  funds  left  in  our  care,  and  to  assist  those 
who  have  neither  the  experience  nor  the  wisdom  of  you 
gentlemen,  in  bringing  about  a  better  condition.  Frankly, 
I  find  a  woful  lack  of  unanimity  as  to  the  remedy.  Leav- 
ing out  the  trustee  feature  which  I  think  you  will  agree 
cannot  be  taken  advantage  of  universally,  we  find  the 
Stock  Savings  Bank  men  claiming  exclusive  privileges  in 
denying  any  savings  rights  to  the  national  bank  or  to  the 
trust  company.  Possibly  they  are  right,  and  yet  these 
institutions  receive  savings  deposits  sometimes  openly  and 
sometimes  as  "interest"  deposits,  and  the  masses  are  not 
able  to  distinguish  either  the  depository  or  the  security 
offered  by  them.  That  this  condition  exists  is  clearly 
evidenced  at  your  own  doors.  Your  most  efficient  Com- 
missioner, Mr.  Williams,  calls  attention  to  it  in  his  report 
for  1907,  and  repeats  it  almost  verbatim  in  1908.  Let  me 
quote  by  way  of  emphasis : 

''It  was  evidently  the  original  legislative  intent  that  the  different 
classes  of  financial  institutions  should  confine  their  public  service 
to  their  own  particular  spheres.  Lack  of  clear  differentiation  be- 
tween the  functions  of  each  class  and  confusion  as  to  the  statutory 
limitation  have  prevented  the  holding  of  these  institutions  strictly 
within  the  original  lines  of  their  intended  activity.    As  a  result, 


470  HISTORY  OF  THE  SAVINGS  BANKS 

the  encroachment  of  one  upon  the  legitimate  field  of  another  has 
ensued.  It  was  not  the  original  legislative  intent  that  the  trust 
company  should  engage  in  commercial  banking,  trespassing  upon 
the  field  of  the  bank  of  discount.  It  was  not  the  original  legislative 
intent  that  the  bank  of  discount  should  engage  in  the  business  of  a 
Savings  Bank. 

''However  far  these  encroachments  may  have  extended,  or 
whatever  may  have  been  their  impropriety,  it  would  seem  that  no 
class  has  assumed  the  additional  functions  without  some  warrant 
in  law.  It  would  be  injudicious  to  demand  a  return  by  each  class 
to  the  particular  sphere  of  activity  originally  contemplated  by  the 
Legislature,  as  that  would  result  in  great  disturbance  to  their 
patrons  as  well  as  to  the  corporations  themselves.  It  would  seem 
equally  unwise  to  set  aside  such  distinguishing  features  of  corporate 
power  and  restriction  as  have  characterized  each  from  the  outset. 
So  far  as  is  possible,  however,  the  assumption  of  powers  and  functions 
outside  of  the  appropriate  fields  should  be  checked  and  the  in- 
stitutions under  State  Supervision  restrained  from  further  trespass 
upon  one  another's  domains. 

"It  is  generally  recognized  that  Savings  Banks  are  philanthropic 
institutions  whose  function  is  to  care  for  the  savings  of  the  provi- 
dent poor.  Restrictive  laws  have  been  acted  with  a  view  to  abso- 
lute protection  in  the  investment  of  these  accumulated  deposits, 
and  the  laws  pertaining  to  the  administration  of  the  trust  contem- 
plate the  use  of  these  funds  solely  for  the  greatest  benefit  of  the 
depositor. 

"Yet  we  find  the  bank  of  discount,  with  questionable  authority, 
encroaching  to  a  very  large  extent  upon  the  legitimate  field  of  the 
Savings  Banks  through  what  is  commonly  termed  the  'interest 
department,'  so  named  in  evasion  of  the  spirit  of  the  law.  In  this 
interest  department  there  are  used  pass-books  with  regulations 
similar  to  those  adopted  by  the  regularly  organized  Savings  Banks, 
in  some  cases  with  the  evident  purpose  of  deceiving  depositors  as  to 
the  character  of  the  institution  in  which  they  are  depositing  their 
savings, 

"It  has  been  the  evident  intent  of  the  Legislature  to  mark  clearly 
the  distinction  between  the  Savings  Bank  and  the  bank  of  discount 
by  fixing  certain  limitations  upon  the  use  of  the  word  'savings.' 
These  provisions,  however,  have  been  practically  set  at  naught 
through  the  installation  of  the  'interest  department.'  The  savings 
deposits  of  these  banks  are  protected  by  the  safeguards  which  it  has 
seemed  proper  to  impose  upon  the  legitimate  savings  institutions. 
They  may  be  used  with  those  of  commercial  accounts,  in  loans 
and  discounts;  they  are  in  no  way  preferred.  I  deem  it  proper 
that  the  investment  of  such  deposits  should  be  limited  to  securities 
approved  for  Savings  Banks,  and  that  these  securities  should  be  set 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   471 

aside  for  the  protection  of  such  deposits  in  case  of  hquidation  or 
other  need.  These  conclusions  apply  with  equal  force  to  trust 
companies  in  so  far  as  they  have  encroached  upon  the  legitimate 
field  of  the  Savings  Bank. 

"It  might  be  suggested  that  a  minimum  limit  might  be  placed 
upon  the  size  of  a  deposit  account  upon  which  a  bank  or  trust  com- 
pany might  pay  interest,  and  it  is  clear  that  such  legislation  would 
contribute  to  a  cure  of  the  existing  condition.  It  would  be  difficult, 
however,  to  apply  this  principle  in  localities  within  the  State  not 
affording  Savings  Bank  privilege.  In  such  localities  the  use  of  the 
bank  of  discount  by  small  depositors  is  common,  and  in  our  judg- 
ment worthy  of  encouragement. 

"An  injustice  would  be  done  were  we  to  deal  with  all  financial 
institutions  in  accordance  with  the  names  under  which  they  oper- 
ate, rather  than  with  reference  to  the  character  of  business  in  which 
they  are  engaged.  In  short,  if  the  commercial  bank  or  trust  com- 
pany is  actually  doing  a  Savings  Bank  business,  whatever  it  may  be 
called,  its  deposits  of  that  character  should  be  protected  by  such 
safeguards  as  the  Legislature  has  thought  proper  to  apply  to  the 
legitimate  Savings  Bank  business." 

That  jealousy  and  resentment  exist  as  a  result  of  present 
conditions  is  evidenced  in  a  report  of  the  New  Jersey  State 
Bankers'  Association,  held  only  a  few  days  since.     It  says: 

"The  formation  of  a  separate  organization  by  the  Savings 
Banks  seems  to  have  had  its  inception  in  a  feeling  among  certain 
Savings  Bank  men  that  their  interests  were  endangered  by  the  trust 
companies  and  national  banks  doing  a  Savings  Bank  business. 
How  far  this  feeling  is  justified  it  is  not  the  purpose  of  this  report 
to  determine.  It  is  sufficient  to  say  that  the  existence  of  this  feeling 
keeps  the  Savings  Banks  out  of  the  New  Jersey  Bankers' Association 
as  individuals  and  causes  them  to  think  that  their  interests  can  be 
best  subserved  by  an  organization  of  their  own,  either  within  or 
without  this  Association.  The  action  of  that  organization  indi- 
cates that  they  would  come  into  the  New  Jersey  Bankers'  Associ- 
ation if  they  would  be  received  as  a  section  with  privileges  similar 
to  the  sections  of  the  American  Bankers'  Association. 

And  another: 

"While  we  may  oppose  the  plan  of  State  or  Government  insurance 
on  guarantee  of  deposits,  we  must  sympathize  with  the  desire  of 
the  people  at  large  to  have  their  deposits  made  as  safe  as  they  can 
possibly  be  made.    It  is  not  sufficient  for  us  as  bankers  merely  to 


472  HISTORY  OF  THE  SAVINGS  BANKS 

oppose  this  proposition.  It  is  incumbent  on  us  to  take  steps  to 
make  impossible  just  as  nearly  as  we  can  the  failure  of  any  State 
or  national  bank,  and  we  shall  fail  in  our  opposition  unless  we  are 
able  to  present  a  plan  which  will  practically  accomplish  the  desired 
end  and  at  the  same  time  be  based  on  sound  business  principles. 
Is  it  better  to  regulate  your  own  afifairs  or  to  have  them  regulated 
for  you?  Is  it  better  to  be  compelled  by  Government  influences  to 
do  what  is  right  or  to  do  it  of  your  own  initiative? 

"Realizing  that  the  interest  of  every  bank  in  the  community 
is  vitally  bound  up  in  the  soundness  of  every  neighboring  banking 
institution,  what  better  way  to  protect  and  further  our  interests 
than  close  association?  For  no  matter  how  sure  you  are  of  the 
soundness  of  your  institution,  you  want  to  know  that  the  other 
bank  is  all  right,  too.  The  only  way  to  remove  this  distrust  is  by 
closer  affliation  and  proper'examination. 

I  hold  that  we  should  not  attempt  to  curtail  any  of  the 
banking  facilities  now  enjoyed  in  this  country.  The 
people  should  be  given  every  possible  agency  consistent 
with  safety  and  good  business  principles.  The  Savings 
Bank  man  says  the  national  bank  should  not  receive 
savings  deposits;  he  says  the  same  thing  about  the  trust 
companies,  and  yet  all  seem  to  be  doing  a  very  commend- 
able duty  in  the  communities  in  which  the}'  are  established. 
Would  you  take  away  from  these  two  last-mentioned 
classes  of  banks  these  privileges?  I  doubt  very  much 
whether  you  could,  and  I  doubt  further  whether  it  would 
be  desirable.  The  figures  which  I  have  given  you  are 
evidence  that  the  people  want  these  depositories,  and  I 
think  it  is  our  duty  as  bankers  to  recognize  the  demand 
of  our  clients  from  a  purely  unselfish  standpoint,  and 
permit  our  people  to  deposit  their  savings  where  it  is  most 
convenient;  but  for  their  protection,  these  funds  should 
be  most  sacredly  safeguarded  and  their  investment  re- 
stricted, no  matter  by  whom  received.  A  savings  deposit, 
whether  made  in  the  national  bank,  a  Mutual  Savings 
Bank,  a  Stock  Savings  Bank,  a  State  bank,  or  a  trust  com- 
pany, should  be  under  the  law  of  the  State  in  which  those 
institutions  are  located,  and  we  should  see  to  it  that  the 
laws  are  made  reasonably  uniform.  I  have  not  the  slight- 
est doubt  but  that  the  Federal  Government  will  cooperate 


SECRETARY,  IgOQ 
TREASURER,  loOO-OT 


JONATHAN  B.  CURREY 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    473 

with  us,  and  while  I  have  not  been  definitely  advised  yet 
I  am  convinced  that  the  same  restriction  now  imposed  on 
national  banks  as  to  taxation  in  the  respective  States  could 
be  made  to  apply  to  the  investment  of  savings  deposits. 
I  could  quote  you  letters  by  the  dozen  received  from  the 
Commissioners  of  Banking,  Governors,  and  the  Presidents 
of  State  bank  associations,  all  accepting,  practically  with 
unanimity,  the  situation  of  the  dual  or  departmental  in- 
stitution, but  demanding,  whether  it  could  be  under  one 
charter  or  separate  ones,  that  they  all  be  required  to  act 
under  one  and  the  same  law,  embodying  these  prime  req- 
uisites :  "  Savings  deposits  should  be  segregated,  and  their 
investment  most  carefully  safeguarded." 

California,  a  most  progressive  State  in  our  line,  has  re- 
cently adopted  a  new  banking  law  compiled  by  a  commis- 
sion of  bankers  and  leading  members  of  their  legislative 
bodies,  which  to  my  mind  bids  fair  to  be  the  banking  law 
of  the  future.  Clean-cut,  concise,  and  comprehensive,  it 
permits  the  organization  of  the  three  principal  types  that 
I  have  referred  to  separately  or  collectively.  In  the  latter 
case  it  permits  of  most  economical  administration  so 
necessary  in  the  smaller  communities.  My  good  friend 
WiUiams  may  not  agree  with  me  in  this  rather  sweeping 
recommendation,  and  possibly  you  will  not,  because  of 
the  security  you  feel  in  your  special  class.  You  need 
no  legislation  or  advice,  but  there  are  other  sections 
that  do,  and  we  want  you  to  deal  kindly  with  your 
neighbors,  and  help  along  the  good  work.  As  an  in- 
centive, let  me  quote  a  few  messages  from  widely  different 
communities : 

Illinois. — J.  L.  Hamilton,  ex-President  of  American 
Bankers'  Association:  "The  kind  of  Savings  Banking  in- 
stitutions that  we  most  generally  favor  in  this  State  I  think 
are  the  ones  that  would  carry  with  them  the  trust  and 
Savings  Bank  features,  and  to  which  may  be  added  the 
commercial  deposit.  These  banks  are  very  popular  and 
very  strong  in  this  State,  and  people  seem  to  have  great 
confidence  in  them.     I  think,  however,  that  the  savings 


474  HISTORY  OF  THE  SAVINGS  BANKS 

deposits,  trust  funds,  and  the  commercial  accounts  should 
be  kept  in  separate  and  distinct  departments." 

Iowa. — A.  Reynolds,  President  Des  Moines  National 
Bank :  "I  am  in  receipt  of  report  of  the  Savings  Bank  Law 
Committee,  and  I  heartily  approve  of  all  the  suggestions 
contained  therein.  Indeed  the  suggestions  are  in  the 
line  with  those  which  I  presented  to  the  Monetary  Com- 
mission of  Congress  a  few  months  ago  relative  to  savings 
departments  connected  with  the  national  banks." 

Maryland. — President  Maryland  State  Bankers'  Asso- 
ciation: "Savings  are  being  deposited  in  all  kinds  of 
banks,  savings,  commercial,  and  national.  No  rule  seems 
to  govern  the  matter." 

Missouri. — H,  Hunicke,  Cashier  German  Savings  In- 
stitution, St.  Louis:  "We  have  the  word  'Savings'  incor- 
porated in  our  name,  but  we  have  never  operated  as  a 
Savings  Bank,  and  we  have  never  conducted  a  savings 
department.  We  are  strictly  a  commercial  bank.  There 
are  no  Savings  Banks  in  Missouri;  trust  companies  hold 
the  field." 

Montana. — State  Examiners:  "Savings  deposits  in 
Montana  are  banked  in  the  State,  national,  and  private 
banks." 

North  Dakota. — R.  C.  Kittel,  President  First  National 
Bank,  Casselton:  "Savings  deposits  in  North  Dakota  are 
banked  with  all  of  the  State  banlvs,  trust  companies,  and 
national  banks.  At  the  last  meeting  of  our  Executive 
Committee  for  the  North  Dakota  Bankers'  Association, 
the  question  of  segregated  savings  deposits  and  providing 
a  special  form  of  investment  was  discussed." 

I  hope  I  have  impressed  you  with  the  gravity  of  the 
situation  and  the  weight  of  our  task.  Will  you  not  as 
members  of  a  great  banking  organization  join  us  and  add 
the  weight  of  your  membership  to  our  efforts?  The 
Savings  Bank  Section  extends  the  right  hand  of  fellow- 
ship, and  hopes  that  you  will  grasp  it  with  a  vigor  that 
will  tell  us  plainly  that  you  arc  with  us,  heart  and  soul, 
in  the  reforms  that  we  hope  ultimately  to  bring  about." 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   475 
ADDRESS   OF   aiR.    CLARK  WILLIAMS 

Mr.  President  and  Members  of  the  Savings  Bank  Asso- 
ciation of  the  State:  First  of  all,  gentlemen,  I  desire  to 
return  my  sincere  appreciation  to  Mr.  Mulry  for  the  ex- 
pression of  his  personal  opinion  as  to  the  accomplishments 
of  the  Banking  Department  during  the  recent  past. 

When  your  President  asked  me  to  address  you  on  this 
occasion,  I  advised  him  that  whatever  I  might  have  the 
opportunity  to  say  could  not  be  characterized  as  an  ad- 
dress, and  if  in  this  particular  he  has  taken  advantage  of 
you  he  must  bear  the  full  weight  of  responsibility.  It  is  a 
pleasure  to  me  personally  to  be  with  you  again  and  to 
congratulate  you  upon  the  condition  generally  of  the  in- 
stitutions under  your  management  and  under  the  super- 
vision of  the  Banking  Department  of  the  State  of  New 
York.  Your  officers,  doubtless,  through  their  reports, 
have  reviewed  the  history  of  the  year  so  far  as  the  interests 
of  our  Savings  Banks  are  concerned,  and  your  Legislative 
Committee  has  probably  given  you  the  result  of  its  efforts 
for  the  meagre  legislation  desired  in  your  interest.  It  may 
be  interesting  to  you  to  know  certain  facts  regarding  our 
failure  and  our  accomplishment  along  the  line  of  legisla- 
tion this  year.  At  this  session  of  the  Legislature  it  seemed 
to  be  wise  to  hold  our  legislation  to  a  minimum.  There 
were,  however,  two  conditions  which  we  deemed  worthy 
of  adjustment.  A  bill  was  introduced  in  the  Legislature, 
which  had  the  approval  of  the  Banking  Department  and 
of  your  Executive  Committee:  to  enable  a  Savings  Bank 
to  rid  itself  of  an  objectionable  trustee  by  a  two- 
thirds  vote  of  the  Board  of  Trustees.  I  have  in  mind, 
and  doubtless  in  your  experiences  you  may  have  known 
of  a  similar  case  of  a  trustee  who  in  his  local  vi- 
cinity has  lost  his  standing;  he  has  not  the  respect  of 
the  community,  and  he  adheres  naturally  with  great 
tenacity  to  this  one  element  of  respectability,  his  trustee- 
ship in  the  Savings  Bank.  Another  measure  provided 
that  not  exceeding  two  trustees  of  a  Savings  Bank  might 


476  HISTORY  OF  THE  SAVINGS  BANKS 

be  residents  of  contiguous  States  and  that  two  other  trustees 
might  be  non-residents,  provided  that  each  had  and  main- 
tained a  regular  place  of  business  in  the  State  of  New 
York. 

This  legislation,  perhaps,  was  not  clearh^  understood.  I 
know  of  a  number  of  cases  where  the  trustees  of  Sa\dngs 
Banks  are  compelled  by  the  present  statute  indirectly  to 
take  a  hall  bedroom  in  the  City  of  New  York  as  their  per- 
manent residence,  though  they  sleep  in  Stamford,  Con- 
necticut, or  in  some  town  in  New  Jersey.  Now,  that 
hardly  seems  a  dignified  position.  What  is  the  real  reason 
that  a  trustee  of  a  Savings  Bank  should  be  resident  of  the 
State  of  New  York?  You  turn  the  helm  of  the  ferr^'boat 
from  south  to  west,  and  you  will  not  land  in  Brookyn, 
but  in  Hoboken.  Gentlemen,  it  is  the  man  who  makes  the 
trustee ;  it  is  not  his  residence. 

Through  the  cooperation  of  Assemblyman  Francis,  the 
Chairman  of  the  Banking  Committee,  this  bill  was  passed 
in  the  lower  house.  It  was  divided,  however,  in  the 
Senate  Committee  on  Banks,  and  that  part  containing 
the  first  provision  was  on  the  last  day  of  the  session  passed 
again  by  the  lower  house.  That  portion  of  the  bill  con- 
taining the  provision  for  non-resident  trustees  was  not 
reported  by  the  Senate  Committee  on  Banks.  Gentlemen, 
there  is  an  overworked  phrase  that  is  frequently  applied 
and  appealed  to  to  protect  the  legislator  in  his  desire  to 
advance  his  personal  interests  when  they  conflict  with 
measures  for  the  public  good;  it  is  frequently  "out  of  re- 
spect for  the  opinions  of  my  constituents  that  I  must  favor 
or  oppose  legislative  enactment."  The  fact  that  this  pro- 
vision had  the  unqualified  approval  of  the  Executive 
Committee  of  your  Association  and  was  suggested  by  the 
Banking  Department  in  good  faith  seems  not  to  have  been 
regarded  as  of  sufficient  importance  to  certain  members 
of  the  Senate  Committee  on  Banking  to  justify  its  con- 
sideration by  the  higher  branch  of  the  Legislature. 

Although  we  have  met  with  some  success  in  the  past,  as 
our  experience  with  legislative  methods  broadens  I  am 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    477 

convinced,  gentlemen,  that  I  lack  the  essential  qualities 
of  a  good  bill  passer.  As  we  review  conditions  affecting 
Savings  Banks,  I  believe  the  most  striking  evidence  of  your 
characteristic  conservatism  is  reflected  in  the  general  con- 
sideration of  the  reduction  of  the  rate  of  interest  paid 
to  depositors.  A  knowledge  of  the  general  conditions 
throughout  the  State  compels  the  conclusion  that  the 
greatest  offence  to  economic  principles  and  sound  banking 
lies  in  the  present  high  interest  rate.  This  evil  results,  as 
I  have  frequently  stated  before,  from  improper  competition 
and  unreasoning  desire  for  quantity  rather  than  quality. 
Deposits  are  still  a  liabilit}^  and  should  not  be  recklessly 
solicited  or  procured  by  the  offering  of  high  interest  rates 
at  the  sacrifice  of  safety.  The  practice  of  this  offence 
against  the  principles  of  sound  banking  is  indulged  in  by 
banks  of  discount,  both  State  and  national,  as  well  as  by 
the  trust  companies,  largely  through  the  instrumentality 
of  their  so-called  interest  departments;  and  it  is  proper 
for  me  to  say,  in  Mr.  Johnson's  presence,  that  I  am  speak- 
ing now  to  the  Savings  Banks  of  the  State  of  New  York, 
and  whatever  I  sa}^  should  not  be  interpreted  as  being  an 
indication  of  the  conditions  which  might  in  my  judgment 
be  proper  in  the  States  in  the  far  West  and  in  the  South. 
The  Savings  Bank,  as  we  all  know,  in  this  State  is  a  semi- 
philanthropic  institution.  It  is  created  as  the  depository 
for  the  savings  of  the  provident  poor.  No  one  can  prop- 
erly profit  by  its  operation  but  the  depositors  themselves. 
The  restrictions  laid  upon  the  Savings  Banks  by  the 
statutes  are  such  as  to  require  the  safest  possible  invest- 
ments, and  the  statutes  also  contemplate  the  largest  pos- 
sible return  to  the  depositor  consistent  with  sound  bank- 
ing. So  in  the  discussion  of  the  rates  Savings  Banks  should 
pay,  it  is  fair  to  keep  this  fundamental  fact  in  mind.  But 
what  is  the  condition,  at  the  present  time,  regarding  the 
Savings  Banks  in  the  State  of  New  York?  We  find  by 
comparison  of  the  deposits  with  the  percentage  of  surplus 
which  our  Savings  Banks  have  laid  away  from  year  to  year 
a  most  remarkable  diminution.     You  are  doubtless  famil- 


478  HISTORY  OF  THE  SAVINGS  BANKS 

iar  with  the  statements  which  show  this  result.  Suffice 
it  to  say  that  on  January  i,  1890,  the  percentage  of  sur- 
plus to  deposits  was  seventeen  per  cent.,  and  practically 
each  year  since  that  time  there  has  been  a  decrease  until 
now  it  is  at  seven  per  cent.  Whatever  be  the  reason  for 
this  decrease  with  the  falling  rate  of  interest  on  conserva- 
tive investments,  this  disregard  of  surplus  in  the  payment 
of  high  interest  rates  would  in  time  result  disastrously 
for  the  depositors, 

I  am  not  impressed  with  the  argument  that  because  cer- 
tain banks  are  paying  at  the  rate  of  four  per  cent,  all  should, 
and  conversely,  because  certain  banks  are  paying  at  the 
rate  of  three  and  a  half  per  cent,  all  should.  But  I  do 
believe  that,  so  far  as  the  Savings  Banks  are  concerned, 
the  affairs  of  each  are  administered  by  trustees  who 
are  competent  to  discharge  the  duties  imposed  upon 
them  by  the  trust.  Conditions  in  banks  may  differ, 
and  it  is  for  the  trustees  in  every  Savings  Bank  to  deter- 
mine for  themselves  the  proper  rate  of  interest  to  pay 
to  depositors,  taking  into  consideration,  as  they  must, 
the  absolute  safety  of  the  principal  and  the  main- 
tenance of  the  proper  surplus  reserve,  to  which  the 
present  depositor  may  in  fact  properly  contribute  for  the 
benefit  of  posterity. 

It  is  most  unfortunate  that  the  interest  departments 
have  been  permitted  to  develop  in  national  banks,  State 
banks,  and  trust  companies  throughout  the  State.  This  is, 
to  my  mind,  an  improper  encroachment  upon  the  legitimate 
field  of  the  Savings  Banks,  and  if  it  is  impracticable  to 
prevent  it  at  the  present  time,  it  should  be  properly  con- 
trolled in  the  interest  of  sound  banking  and  for  the  public 
good.  There  is  no  economic  analogy  which  justifies  the 
payment  of  the  four  per  cent,  rate  by  these  institutions 
because  the  Savings  Bank  in  their  vicinity  pays  at  that 
rate;  and  I  find  elements  of  danger  in  the  practice  which 
should  be  apparent  to  any  one  analyzing  the  proposition. 
Four  per  cent,  interest,  plus  the  expense  account,  plus  the 
proper  charge  for  reserve!     Gentlemen,  these  represent  a 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    479 

cost  price  for  money  which  is  difficult  to  cover,  if  conser- 
vative use  is  made  of  the  funds. 

As  to  the  interest  to  the  depositors,  I  would  say  a  deposi- 
tor's savings  are  not  protected  by  a  compulsory  investment 
in  high-grade  securities,  but  may  be  used  in  general  loans 
and  commercial  discounts.  In  time  of  stress  there  is  no 
postponement  of  depositors'  claims  for  sixty  days  which 
may  be  relied  upon,  and  the  attack  may  be  made  not  only 
through  the  doors  of  such  an  institution  but  through  the 
exchanges  and  clearances.  I  consider  it  my  most  pressing 
duty  to  endeavor  to  effect  a  general  reduction  of  rate  of 
interest  in  our  institutions  throughout  the  State,  not  only 
in  the  interests  of  the  corporations  themselves,  but  in  the 
interest  of  those  who  have  entrusted  their  funds  to  these 
depositories  for  safekeeping.  And,  gentlemen,  I  have 
ventured  to  prophesy  on  several  occasions  that  because 
of  the  conservatism  to  which  I  have  referred  as  character- 
izing the  management  of  our  Savings  Banks,  there  wiU  be 
a  general  reduction  in  the  interest  rates,  and  it  is  for  you 
to  determine  whether  this  prediction  shall  come  true.  If 
it  is  right  that  the  interest  rate  in  your  bank  be  reduced, 
it  Hes  with  you  to  answer  with  your  good  judgment  in  the 
interest  of  those  who  have  intrusted  and  shall  intrust 
savings  to  your  care,  regardless  of  the  action  of  your 
neighbor.  If  your  institution  will  be  any  stronger  at  the 
present  time,  or  in  the  years  to  come,  if  you  reduce  your 
rate,  it  is  clearly  your  duty  to  adopt  that  policy. 

General  observation,  gentlemen,  compels  the  conclu- 
sion that  the  management  of  our  Savings  Banks  is  char- 
acterized by  an  unselfish  adherence  to  the  principles  upon 
M^hich  these  philanthropic  institutions  are  founded,  and 
I  most  sincerely  congratulate  you  upon  the  result  of  your 
unselfish  efforts  in  the  interests  of  your  f ellowmen. 

ADDRESS   OF   MR.  E.  P.  MAYNARD 

Mr.  President  and  Gentlemen  of  the  Association :  That 
I  might  not  be  charged  with  plagiarism,  I  may  say  that 
strangely  enough  my  line  of  thought  has  run  almost 


48o  HISTORY  OF  THE  SAVINGS  BANKS 

exactly  along  that  followed  by  Superintendent  Williams 
in  his  address,  and  I  hope,  even  though  he  spoke 
before  I  did,  that  my  remarks  may  receive  his  endorse- 
ment. 

Wliat  came  most  forcibly  to  my  mind  when  requested 
by  the  President  of  the  Association  to  say  a  few  words — 
because  I  will  not  characterize  what  I  am  to  say  as  an 
address — was  this:  That  some  one  ought  to  speak  upon 
the  evident  tendency  among  Savings  Bank  officials  to  con- 
sider that  there  must  be  some  uniform  rate  of  interest 
among  the  Savings  Banks  when  the  next  dividend  is  de- 
clared. Early  in  January  a  number  of  nevv^spapers  had 
long  articles  quoting  various  ofhcials  of  Savings  Banks, 
though  not  by  name,  as  to  what  the  rate  of  interest  should 
be  in  July.  We  had  not  then  paid  the  January  dividend. 
Some  of  the  up-State  newspapers  even  went  so  far  as  to 
communicate  with  the  officials  of  the  Savings  Banks  of 
the  City  of  New  York  asking  what  a  definite  rate  should 
be,  and  there  was  correspondence  between  Savings  Bank 
officials  and  various  persons  as  to  what  the  Savings  Bank 
rate  ought  to  be.  I  noted  yesterday  in  the  newspapers 
that  the  dividends  of  all  the  Savings  Banks  of  the  County 
of  New  York  and  of  the  County  of  Kings  had  just  been 
declared,  and  that  they  are  generally  to  be  four  per  cent., 
although  the  trustees  of  the  various  Savings  Banks  in 
these  two  counties  have  not  yet  met  and  considered  the 
subject. 

Now,  gentlemen,  as  the  Superintendent  of  Banking  of 
the  State  has  said,  it  seems  to  me  that  every  individual 
board  of  trustees  and  every  individual  set  of  officials  of 
every  Savings  Bank  must  pass  on  the  question  as  to 
whether  their  individual  bank  is  able  to  pay  four  per  cent. 
The  question  is  not  whether  it  has  earned  four  per  cent, 
in  the  last  six  months,  but  whether  it  can  add  sufficient 
to  its  surplus  to  make  it  the  strong  bank  that  it  should  be 
if  it  does  declare  a  four  per  cent,  dividend.  I  am  aware, 
as  an  official  of  an  old  bank,  a  bank  of  moderate  strength, 
a  bank  that  carries  a  moderately  large  surplus,  that  that  is 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   481 

a  comfortable  position  for  one  to  take.  But  I  take  it  as  a 
business  man  and  as  a  Savings  Banl<.  man  of  many  years' 
experience.  I  looked  over  the  reports  of  the  Savings 
Banks  of  the  State,  and,  without  criticising  the  manage- 
ment of  any  particular  bank,  I  noticed  many  banks  that 
are  not  really  capable  of  paying  four  per  cent,  interest. 
Now,  gentlemen,  my  plea  is  for  a  strong  surplus.  I  have 
been  reading  articles  lately  in  some  publications  which 
seem  to  be  endeavoring  to  ascertain  as  to  what  the  mini- 
mum surplus  may  be;  not  the  maximum,  or  how  much 
we  can  accumulate  to  a  reasonable  point  to  protect  our 
depositors,  but  how  small  a  surplus  we  can  get  along  with, 
and  stiU  be  safe,  perhaps.  Now  my  position  is,  in  the  first 
place,  the  Legislature  in  its  wisdom  has  said  we  can  accu- 
mulate a  surplus  equal  to  fifteen  per  cent,  of  our  deposits 
on  the  par  value  of  our  security.  We  will  shave  that  sum, 
but  do  let  us  aim  at  ten  per  cent,  at  least  and  strive  to 
get  there.  There  is  only  one  way  to  do  this,  and  that  is 
to  add  consistently  every  six  months  to  our  surplus,  and 
have  the  courage,  if  necessary,  to  cut  our  dividend  to 
do  it. 

I  have  been  looking  over  the  records  of  the  institution 
with  which  I  happen  to  be  connected,  and  have  been  for 
many  years,  and  I  observed  many  instances  where  they 
have  cut  their  dividend  even  to  three  per  cent.,  in  order 
to  keep  the  surplus  where  it  should  be.  Failure  to  add  to 
the  surplus,  I  take  it,  is  not  the  only  cause  of  a  decrease 
in  the  percentage  of  the  suiplus  by  any  means,  but  an 
abnormal  increase  in  deposits  caused  by  the  large  divi- 
dends that  are  paid,  and  the  attraction  of  sums  of  money 
which  do  not  belong  in  Savings  Banks,  but  are  accepted 
on  deposit. 

Gentlemen,  I  want  to  talk  plainly  to  you  as  members  of 
the  Association,  and  I  do  not  mean  to  specialize  any  one 
particular  bank,  but  I  know  what  the  general  practice  is 
among  Savings  Banks,  and,  as  we  are  a  lot  of  Savings 
Bank  men  here  together  to-day,  I  think  it  well  to  talk 
plainly.     I  have  noticed  that  though  we  add  a  very  sub- 


482  HISTORY  OF  THE  SAVINGS  BANKS 

stantial  amount  to  the  surplus  in  six  months,  the  increase 
in  liabilities  caused  by  the  additional  dividend,  and  even 
a  small  increase  in  the  deposits  comparatively,  will  barely 
serve  to  keep  your  percentage  of  dividend  where  it  was; 
that  if  your  depositors  increase  very  materially,  you  have 
got  to  add  heavily  to  the  surplus  in  order  to  keep  the  per- 
centage where  it  belongs.  There  is  a  common  practice 
among  Savings  Banks — I  won't  say  how  common  it  is,  but 
I  know  that  many  banks  do  it — and  that  is  allowing  a  man 
to  open  a  three  thousand  dollar  account  with  the  bank, 
and,  if  he  happens  to  have  fifteen  thousand  dollars,  per- 
mitting him  to  open  four  more  accounts  in  that  bank  in 
trust  for  various  members  of  his  family.  Gentlemen,  I 
call  that  increasing  deposits  abnormally,  and  that  line  of 
policy,  if  pursued,  will  make  it  almost  impossible  for  you 
to  keep  your  percentage  of  surplus  where  it  belongs.  I 
have  a  common  feeling  with  the  smaller  Savings  Banks 
in  their  desire  to  grow  and  to  increase  in  size  and  to  be- 
come more  useful,  but  I  believe  the  smaller  banks  have  got 
to  get  through  the  troubles  of  childhood  just  as  the  present 
large  banks  did  in  their  earlier  days,  and  that  they  must 
pay  a  dividend  that  they  can  afford,  and  still  add  to  the 
reserve.  I  was  taught  when  I  started  in  this  business 
that  the  main  object  of  a  Savings  Bank  was  to  see  to  it 
that  it  was  always  ready  to  pay  back  to  depositors  their 
money,  and  next  to  declare  dividends.  Not  dividends 
first  and  pay  depositors  afterward.  Be  sure  your  deposi- 
tors are  protected  first.  The  smaller  Savings  Banks, 
especially  in  the  suburban  localities,  have  had  this  thing 
to  contend  with,  namely,  that  the  larger  banks  are  very 
attractive  to  depositors,  and  sometimes  their  territories 
have  been  invaded  by  the  larger  banks  by  means  of  ad- 
vertising, and  deposits  withdrawn  from  the  places  where 
they  would  naturally  be  made.  I  sympathized  with  the 
gentleman  who  arose  in  his  seat  at  one  of  our  meetings 
a  year  or  two  ago  and  protested  against  such  policy.  He 
represented  an  out-of-town  bank.     He  was  right. 

The  law  says  the  Superintendent  shall  approve  of  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   483 

location  of  a  Savings  Bank,  intending  that  that  particular 
bank  should  have  the  territory  in  which  it  is  located,  and 
that  other  banks  should  not  enter  it.  And  when  this 
gentleman  protested,  I  thought  he  knew  what  he  was 
talking  about,  and  I  believed  he  had  good  grounds  for  what 
he  said. 

I  very  much  deprecate  personally  the  public  discussion, 
especially  in  the  newspapers,  as  to  what  the  rate  of  interest 
shall  be,  by  the  Savings  Banks.  I  think  it  is  prejudicial 
to  the  situation;  I  think  it  rather  compels  to  some  degree 
at  least  the  trustees  of  smaller  Savings  Banks  to  a  con- 
clusion that  they  also  must  pay  this  rate  of  interest  when 
they  cannot  properly  afford  it.  I  think,  gentlemen,  that 
these  things  should  be  matters  of  discussion  between  Sav- 
ings Bank  officials,  and,  if  you  will  pardon  me  for  saying 
so,  not  discussions  with  reporters  for  newspapers  until 
after  the  trustees  have  decided  first  without  any  persuasion 
from  outside. 

I  anticipate,  gentlemen,  that  the  plenitude  of  money, 
and  the  fact  that  it  is  seeking  investment,  will  turn  a  great 
deal  of  it  into  the  Savings  Banks  this  coming  July,  during 
the  ten  days  allowed  for  the  commencement  of  interest. 
In  many  banks  of  the  city  there  is  a  standing  resolution  on 
the  books  authorizing  the  officials  not  to  accept  more  than 
five  hundred  dollars  a  day  in  any  one  six  months  in  their 
discretion.  I  believe  that  is  a  good  resolution  for  every 
board  of  trustees  to  adopt  and  have  on  their  books,  to  be 
applied  and  used,  and  I  believe  it  should  be  specially  used 
against  the  three  thousand  people  because  they  are  the 
first  people  to  come  down  on  you  in  time  of  panic ;  they  are 
the  first  people  to  demand  their  money.  Why,  one  man 
complained  to  me  during  the  recent  panic  that  it  was  very 
hard  on  him  that  he  could  not  get  his  money  when  stocks 
were  so  low.  He  wanted  to  take  advantage  of  the  very 
situation  that  would  compel  us  to  sell  securities  to  get  the 
money  to  provide  him  with  funds  with  which  to  speculate. 
Gentlemen,  those  people  have  no  place  in  the  Savings 
Bank.     You  meet  them  every  day;  people  that  have  an 


484  HISTORY  OF  THE  SAVINGS  BANKS 

account,  several  accounts;  they  will  have  a  whole  bunch 
of  bank  books,  and  I  tell  }'ou  that  we  can  do  much  as  offi- 
cials to  keep  down  this  tendency,  and  to  help  out  the  sur- 
plus in  that  way,  for  it  suffers  as  much  in  that  way  as  it  does 
in  the  other.  We  add  too  much  to  our  deposits,  and  do  not 
put  enough  to  our  surplus. 

There  is  one  feature  of  the  surplus  question  that  I  have 
never  heard  spoken  of  that  has  always  appealed  to  me. 
Once  in  a  while  I  read  in  the  newspapers  about  some  man 
that  wants  to  divide  up  his  suiplus  all  at  once.  Indeed,  I 
met  a  man  who  has  been  for  years  in  one  of  the  large 
banks  in  the  City  of  New  York,  who  stated  to  me  that  he 
did  not  think  there  should  be  any  surplus  in  the  Savings 
Banks;  he  thought  they  ought  to  pay  out  all  their  divi- 
dend, and  if  they  made  any  losses,  why,  take  it  out  of  the 
earnings  for  that  period.  But  he  did  not  seem  to  be  in 
that  state  of  mind  during  the  panic.  It  was  before  the 
panic. 

Some  people  seem  to  have  the  idea  that  where  a  Savings 
Bank  has  a  large  surplus  it  is  withholding  something  from 
its  depositors.  I  do  not  know  but  what  to  some  extent 
that  may  be  perhaps  slightly  true,  but  it  is  a  fact  that 
we  must  all  contribute  for  the  good  of  the  many.  If  we  are 
to  build  up  a  strong  institution,  every  depositor  must  pay 
his  share  toward  it.  It  is  a  great  deal  better  to  have  a 
strong  institution  at  the  end  of  ten  years  than  to  have  a 
strong  institution  at  the  end  of  seventy-five  years,  and 
then  not  be  there  to  see  it  at  the  time.  Did  it  ever  occur 
to  you  that  the  income  from  the  surplus  alone,  where  it  is 
perhaps  ten  per  cent.,  is  more  than  sufficient  to  pay  the 
entire  local  expenses  of  the  bank,  and  add  something  to 
the  surplus  also?  Did  it  ever  occur  to  you  that  as  a  matter 
of  fact  the  depositor  in  a  bank  which  reaches  that  point 
pays  none  of  the  local  expenses  of  the  bank?  That  is  the 
way  it  figures  out,  gentlemen,  and  if  you  reach  that  point, 
you  find  yourselves  in  the  position  where  you  do  not  pay 
all  the  market  cost — I  beg  your  pardon — I  mean  the 
market  value  of  the  securities.     Keep  your  eye  on  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   485 

surplus,  gentlemen,  keep  it  strong,  and  add  to  it  every 
year.  This  is  my  advice,  if  you  will  take  it  from  a 
comparatively  young  man.  Then  you  will  keep  the 
banks  as  they  are  to-day,  the  pride  of  the  State  of  New 
York. 


CHAPTER  XVII 

Seventeenth  Annual  Convention — Severe  Illness  of  President 
Mulry  Prevents  His  Attendance — Resolutions  in  Opposition 
to  the  Constitutional  Amendment  Authorizing  Congress  to 
Impose  a  Tax  on  Incomes  Adopted — Election  of  Charles  E. 
Hanaman,  as  President — Notable  Addresses  by  Hon.  O.  H. 
Cheney,  Superintendent  of  Banks,  Mr.  Pierre  Jay,  and  William 
Frederick  Dix. 

^T  THE  Seventeenth  Annual  Convention  of  the  Asso- 

/-^    ciation,  held  in  the  usual  place  on  Thursday,  May 

26,  1910,  the  Chairman,  Second  Vice-President 

Charles  E.  Hanaman,  announced  the  severe  illness,  following 

a  great  bereavement,  of  President  Thomas  M.  Mulry,  and, 

upon  motion,  former  President  Andrew  Mills  took  the  chair. 

REPORT   OF   THE   EXECUTIVE   COMMITTEE 

The  Report  of  the  Executive  Committee  was  read  by 
Mr.  Hanaman: 

Mr.  Charles  A.  Miller  was  appointed  counsel  to  the  Com- 
mittee for  one  year,  at  a  salary  of  $1,000. 

A  Committee  of  three,  consisting  of  Messrs.  Mills, 
Schenck,  and  Felsinger,  was  appointed  to  take  charge  of 
the  opposition  to  the  amendment  to  the  State  Constitu- 
tion enlarging  the  Hmits  of  municipal  indebtedness. 

This  Committee  was  directed  vigorously  to  oppose  any 
legislation  tending  to  engraft  a  life  insurance  business  on 
the  New  York  Savings  Banks. 

On  April  27,  19 10,  the  Committee  met  to  consider  the 
demand  made  by  the  United  States  Collector  of  Internal 

486 


HISTORY  OF  THE  SAVINGS  BANKS  ASSOCIATION  487 

Revenue  for  payment  of  a  tax  upon  the  income  of  the 
Albany  County  Savings  Bank,  and  its  bearing  on  all  the 
Savings  Banks  of  the  State. 

Counsel  for  the  Association  was  directed  to  procure  an 
official  decision  as  to  the  liability  of  the  Savings  Banks  in 
regard  to  such  tax,  and  communicate  the  same  to  each  Sav- 
ings Bank  of  the  State.  Subsequently  a  favorable  opinion 
was  obtained  from  the  Commissioner  of  Internal  Revenue 
in  Washington,  and  a  copy  of  his  letter  mailed  to  each  of 
the  banks. 

The  attention  of  the  Chairman  of  the  Executive  Com- 
mittee and  of  the  Committee  on  Legislation  was  called  by 
the  President  of  the  Law  and  Order  Union  of  New  York 
State  to  the  resolutions  ratifying  the  proposed  amend- 
ment to  the  Constitution  of  the  United  States  permitt- 
ing Congress  to  impose  a  tax  on  income,  from  whatever 
source  derived.  The  attention  of  the  Legislative  Com- 
mittee having  been  called  to  this  matter  too  late  to  permit 
of  reference  to  the  full  Executive  Committee  before  the  pro- 
posed resolution  came  up  for  action  in  the  Senate,  it  was 
decided  to  call  the  attention  of  each  bank  to  the  matter  by 
telegram,  so  that  if  its  officers  saw  fit  they  might  com- 
municate with  their  representatives  in  the  Senate  and  urge 
such  action  on  this  resolution  as  they  deemed  best.  The 
Committee  on  Legislation  did  not  feel  that  it  could  take 
official  action  in  the  matter  in  the  absence  of  instructions 
from  the  Executive  Committee.  Each  bank  was  commu- 
nicated with  by  telegram  and  a  number  of  the  banks 
registered  with  their  members  of  the  Senate  their  oppo- 
sition to  the  resolution.  By  a  close  vote  the  resolution 
was  adopted  by  the  Senate,  and  at  this  writing  it  is  in  the 
hands  of  the  Committee  on  Rules  in  the  lower  house  of 
Congress. 


488  HISTORY  OF  THE  SAVINGS  BANKS 

The  following  resolution,  recommended  by  the  Executive 
Committee,  was  adopted : 

Resolved,  That  the  Savings  Banks  of  the  State  of  New 
York  believe  that  the  amendment  to  the  Federal  Consti- 
tution, authorizing  Congress  to  impose  a  tax  on  incomes, 
would  be  detrimental  to  their  depositors,  and  might  even 
endanger  the  existence  of  the  Mutual  Savings  Bank  Sys- 
tem.    And  further. 

Resolved,  That  the  Executive  Committee  be  and  hereby 
is  directed  to  oppose  the  ratification  of  the  amendment. 

Upon  Mr.  Charles  E.  Hanaman,  President  of  the  Troy 
Savings  Bank,  was  conferred  the  honor  of  unanimous 
election  to  the  Presidency  of  the  Association,  Mr.  Mulry 
having  declined  reelection. 

In  accepting  the  office,  Mr.  Hanaman  said : 

ADDRESS   OF   PRESIDENT   CHARLES   E.  HANAMAN 

Gentlemen  of  the  New  York  State  Savings  Bank  Associa- 
tion: I  thank  you  for  the  honor  you  have  conferred  not 
only  upon  me  but  upon  the  third  oldest  bank  in  the  State 
by  electing  me  to  the  highest  office  in  your  gift. 

I  am  also  impressed  by  the  fact  that  you  are  by  this  act 
endorsing  that  conception  of  our  work  which  one  hundred 
years  ago  gave  birth  to  our  institutions,  and  which  I  be- 
lieve is  still  the  only  conception  which  justifies  the  exist- 
ence of  ''The  Trustee  Savings  Bank." 

I  am  going  to  ask  you  to  stand  with  me  upon  the  plat- 
form of  that  original  conception,  and  to  do  all  in  your 
power  henceforth  to  stamp  out  that  tendency  to  commer- 
cialism which  has  done  so  much  in  late  years  to  create 
confusion  and  misconception  in  the  public  mind  as  to 
what  the  Savings  Banks  of  the  Great  Empire  State  really 
stand  for. 

I  am  going  to  ask  3^ou  to  help  me  in  my  endeavor  to 
bring  about  a  realization  of  the  fact  that  our  institutions 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   489 

are  not  independent  of  one  another  but  are  engaged  in 
one  great  philanthropic  work;  that  "the  weakest  Unk 
is  the  measure  of  the  strength  of  the  chain";  that  our 
strength  is  not  to  be  measured  by  the  amount  of  our  liabili- 
ties, but  by  the  security  of  our  investments,  the  protec- 
tive power  of  our  "  Surplus,"  and  by  the  confidence  of  the 
public  in  our  sincerity  and  singleness  of  purpose. 

With  the  lapse  of  years,  men  have  entered  our  ranks, 
fresh  from  commercial  fields,  where  they  have  achieved 
success  in  making  money  and  in  building  up  great  busi- 
ness enterprises.  These  men,  filled  with  the  enthusiasm 
of  commercial  success,  have  not  always  stopped  to  realize 
that  their  new  field  of  labor  is  the  exact  opposite,  in  con- 
ception and  function,  to  that  in  which  they  have  won 
their  spurs.  And  so  it  has  come  about  that  some  of  them 
have  deemed  it  their  privilege  to  compete  in  a  commercial 
way  with  their  neighbor  to  substitute  themselves  and  their 
personal  ambitions  for  the  highest  interests  of  the  benefi- 
ciaries for  whose  welfare  alone  their  Savings  Bank  work 
is  justified. 

Let  us  therefore  endeavor  by  our  acts,  our  conversation, 
our  public  statements,  to  see  to  it  that  we  stand  honestly 
and  honorably  before  the  public;  to  see  to  it  that  we  do 
not  allow  our  alleged  altruism  to  be  but  a  cover  for  some 
form  of  selfishness;  our  honor  to  be  lost  in  a  fog-bank  of 
vanity.  Let  us  stand  for  the  character  and  quahty  of  our 
work  rather  than  for  its  quantity;  for  honor  rather  than 
for  vanity.  Let  us  teach  the  pubUc  what  we  really  stand 
for  and,  what  is  equally  important,  let  us  teach  ourselves 
that  our  mission  is  not  to  obtain  control  over  the  largest 
aggregate  sum  of  money  that  we  can  secure  from  the  public 
nor  that  the  success  of  our  work  is  to  be  measured  by  the 
greatness  of  that  sum.  Let  us  teach  ourselves  that  we 
are  not  justified  in  seeking  deposits  by  a  kind  of  competi- 
tion which  is  subversive  of  all  true  philanthropy;  which 
makes  it  impossible  for  us  to  teach  the  public  how  to  make 
a  proper  use  of  our  institutions;  which  fills  the  minds  of 
our  legislators  with  false  and  wild  notions  relative  to  our 


490  HISTORY  OF  THE  SAVINGS  BANKS 

work.  A  kind  of  competition  which  causes  our  commer- 
cial banks  to  enter  into  an  unfair  competition  with  us, 
who,  in  consequence  of  the  character  and  the  necessary- 
restrictions  of  our  work,  cannot  compete  with  them, 
excepting  at  the  expense  of  our  legitimate  depositors 
and  the  maintenance  of  a  false  attitude  toward  the  pub- 
lic. Let  us  remember  that  we  are  not  playing  the 
game  of  commercial  chess,  and  we  surely  do  not  wish 
to  earn  the  reputation  of  playing  that  game  with  trust 
funds. 

What  I  have  said  would  seem  to  imply  that,  in  our  rapid 
development,  some  of  us  have  forgotten  or  have  never  taken 
the  trouble  to  think  out  just  what  a  trustee  or  so-called 
"Mutual"  Savings  Bank  really  is;  that  some  of  our  ships 
have  lost  their  compasses  and  are  sailing  wildly.  Now  I 
think  that  our  New  York  State  Savings  Bank  Law,  al- 
though it  has  some  imperfect  spots  in  it,  is  the  best  and 
most  perfect  Savings  Bank  Law  in  the  world.  I  think 
also  that  our  law  has  crystallized  out  of  the  original  con- 
ception of  our  institutions  in  a  manner  which  has  preserved 
most  perfectly  the  motive  and  intent  of  the  projectors 
of  our  banks.  According  to  our  law,  the  Savings  Banlis 
of  this  State  have  no  capital  stock  and  are  not  organ- 
ized for  profit.  The  income  earned  through  the  invest- 
ment of  the  depositors'  money  is  incidental  to,  and  is  not 
the  primary  object  for,  which  these  institutions  were  organ- 
ized. That  object  has  been  truly  stated  a  great  many 
times  in  the  "information  for  depositors"  attached  to 
the  semi-annual  statements  of  a  large  number,  if  not  of 
the  majority,  of  our  banks  for  years  past,  viz.:  "Savings 
Banks  are  institutions  created  for  the  purpose  of  encour- 
aging thrift  and  the  habit  of  saving  on  the  part  of  the 
people."  It  is  therefore  evident  that  our  institutions  are 
not  commercial  in  any  sense.  The  commercial  bank  is  a 
public  necessity,  for  it  makes  possible  the  great  credit 
system  of  the  business  world.  It  sells  its  service  to  the 
people  for  profit.  Our  Savings  Banks  do  not  sell  their 
service,  but  give  it  in  the  spirit  of  pure  philanthropy  for 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   491 

the  benefit  of  a  certain  class  of  citizens  who  stand  in  need 
of  such  help,  and  the  corporation  per  se  does  not  receive 
a  dollar  for  that  service. 

It  is  evident,  therefore,  that  the  Savings  Bank  is  the 
antithesis  of  the  commercial  bank,  and  the  principles 
governing  the  management  of  the  one  cannot  be  applied 
to  that  of  the  other;  that  the  competition  normal  to  one 
will  work  to  the  detriment  of  the  other. 

The  recent  competition  between  some  of  our  Savings 
Banks  on  the  so-called  "interest  rate"  will  illustrate  the 
point.  Keeping  well  in  mind  the  fact  that,  according  to 
almost  invariable  law,  income  is  in  inverse  ratio  to  the 
security  of  the  investment,  the  bank  whose  income  is  larger 
than  that  of  its  neighbor  will  be  the  weaker  bank,  if  it  does 
not  set  aside  a  larger  proportion  of  its  income  to  increase 
that  protective  group  of  its  assets  known  as  its  surplus,  to 
an  amount  sufficient  to  offset  the  comparative  weakness 
of  the  investments  which  resulted  in  the  greater  earnings. 
And  if  by  competition  such  a  bank  forces  its  intrinsically 
stronger  neighbor  to  impair  the  capital  of  its  depositors 
by  drawing  upon  its  surplus  in  order  (for  self-preservation) 
to  pay  a  like  rate  of  interest  to  its  depositors,  then,  through 
this  act,  both  banks  have  lessened  the  security  of  their 
depositors,  and  the  bank  that  began  the  competition  is 
chiefly  responsible  for  an  injury  to  the  cause  of  a  class  of 
people  it  is  in  honor  bound  to  protect,  for  the  cause  is  a 
common  one,  and  one  group  of  depositors  cannot  fairly 
and  honorably  be  favored  at  the  expense  of  another  group 
in  order  that  one  bank  may  gratify  its  vanity  to  appear 
larger  than  its  neighbor  when  the  measures  of  its  great- 
ness is  confined  to  its  liabiUties.  Now  this  sort  of  com- 
petition has  unfortunately  been  indulged  in  quite  freely 
of  late,  and  the  rapid  shrinkage  of  the  surplus  of  some  of 
our  banks  on  that  account  has  already  reached  the  danger- 
point.  It  is  humiliating,  but  it  seems  to  me  that  nothing 
short  of  the  manacles  of  a  law  regulating  the  apportion- 
ment of  the  net  income  between  the  depositors'  dividends 
and  the  surplus  will  hold  in  check  that  insane  desire  for 


492  HISTORY  OF  THE  SAVINGS  BANKS 

bigness  rather  than  security,  for  quantity  rather  than 
quahty,  that  seems  to  control  the  acts  of  so  many  people 
even  when  their  honor  is  at  stake. 

But  this  sort  of  competition  does  harm  to  the  cause  of 
our  depositors  in  another  way  in  that  it  is  utterly  sub- 
versive of  that  teaching  of  the  thrift  which  is  the  principal 
justification  for  the  existence  of  our  institutions.  We 
cannot  teach  thrift  to  the  class  of  people  who  represent 
the  legitimate  Savings  Bank  depositor  by  offering  him 
a  prize  for  his  money  in  the  form  of  a  practically  guaranteed  ' 
interest  rate.  The  result  of  such  procedure  is  to  him 
extravagance,  for  he  will  wait  with  bated  breath  for  the 
coming  of  the  interest  day  when  he  can  rush  to  the  bank 
and  withdraw  the  prize  and  have  a  good  time  spending  it, 
and  some  depositors  have  told  me  that  they  thought  that 
they  had  to  draw  their  interest  in  order  to  get  it  at  all. 
To  teach  thrift,  unnecessary  withdrawals  should  be  dis- 
couraged, and  the  depositor  taught  to  regard  his  account 
as  an  emergency  fund  to  protect  him  from  want  in  the  un- 
expected time  of  need.  In  fact,  I  am  fully  convinced  that 
it  is  our  duty  to  disabuse  the  pubHc  mind  of  the  idea  that 
our  Savings  Banks  are  available  for  purely  investment 
purposes;  to  make  prominent  the  idea  that  they  exist 
solely  for  the  purpose  of  affording  the  public  an  oppor- 
tunity to  accumulate  an  emergency  fund  which  will  be 
safer  than  a  deposit  in  a  bank  where  it  will  be  subject 
to  the  more  or  less  speculative  risks  of  commercial  bank- 
ing. 

In  my  opinion,  if  our  institutions  are  not  safer  than  the 
commercial  bank,  we  should  make  them  so,  or  there  will 
be  nothing  to  justify  their  existence.  If  the  time  has 
arrived  when  there  no  longer  exists  a  class  of  people  in  the 
community  who  need  our  encouragement  in  order  to 
develop  in  them  habits  of  thrift  and  forehandedness; 
if,  in  fact,  the  work  for  which  our  institutions  came 
into  being  has  been  accomphshed,  or  if  the  commercial 
bank  has  developed  to  a  point  where  it  can  do  our  work 
better  than   we    can,    then   our  institutions  should  be 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   493 

converted  into  trust  companies  or  some  form  of  com- 
mercial bank. 

I  do  not  believe  that  such  a  time  has  arrived,  and  there- 
fore I  earnestly  contend  that  we  should  make  and  keep 
clear  the  distinction  between  our  institutions  and  com- 
mercial banks;  that  we  should  cease  to  hold  out  the  in- 
terest rate  as  a  prize  or  as  the  purchase  price  of  deposits. 
And  I  want  to  emphasize  the  fact  that  we  should  see  to  it 
that  the  margin  of  safety  called  the  surplus  is  not  only 
drawn  upon  either  directly  or  indirectly,  for  the  purpose 
of  keeping  up  an  unwise  and  unjustified  interest  rate,  but, 
that  no  matter  at  what  rate  the  interest  dividends  may 
figure  out,  we  shall  endeavor  to  attain,  and  afterward 
maintain,  a  minimum  margin  of  safety  of  not  less  than  ten 
per  cent,  as  based  upon  the  best  attainable  market 
value  of  our  securities.  For,  although  in  my  opinion  the 
so-called  market  value  surplus  as  a  whole  never  has  any 
actual  existence  excepting  upon  paper,  nevertheless  its 
statistical  value  as  a  guide  to  careful  and  safe  manage- 
ment is  very  great. 

The  investment  value  surplus,  on  the  other  hand,  has  a 
true  and  actual  existence,  and  will  be  gradually  as  fully 
realized,  as  time  goes  on,  as  will  the  par  value  of  our  se- 
curities; and  I  am  fully  persuaded  that  the  possibility  is 
very  remote  of  any  accident  happening  which  wiU  prevent 
that  reaUzation  if  only  we  can  succeed  in  driving  out  and 
keeping  out  of  the  management  of  our  institutions  what 
I  have  characterized  and  tried  to  point  out  as  commer- 
ciaUsm. 

It  is  said  of  a  man  who  has  been  kicked  by  a  mule  that, 
while  he  doesn't  look  so  beautiful  as  he  did  before  being 
kicked,  he  knows  a  great  deal  more.  Now  I  want  the 
Savings  Banks  of  our  State  to  accumulate  sufficient  knowl- 
edge beforehand  to  avoid  the  necessity  of  a  kick  from  the 
mule  called  disaster  and  so  preserve  their  beauty.  And  I 
hope  that  a  year  from  now,  when  I  shall  take  leave  of  this 
chair  in  which  by  your  grace  and  your  courtesy  I  have  to- 
day been  placed,  I  may  be  able  to  congratulate  you  upon 


494  HISTORY  OF  THE  SAVINGS  BANKS 

the  fact  that  we  have  all  with  one  accord  moved  beyond 
the  reach  of  the  mule,  and  have  bid  defiance  to  his  kick. 


ADDRESS  OF  HON.  O.  H.  CHENEY,  SUPERINTENDENT  OF 

BANKS 

I  have  looked  forward  with  much  pleasure  to  the  oppor- 
tunity of  meeting  the  members  of  this  Association.  In 
common  with  other  citizens  of  this  State  I  have  the  high- 
est respect  for  the  Savings  Bank  Trustee.  In  him  we  see 
developed  that  high  sense  of  duty  and  responsibility  pecu- 
liar to  the  citizen  who  desires  to  be  helpful  to  his  com- 
munity. Without  consideration  of  personal  gain,  he  is 
intent  upon  providing  an  agency  potent  to  influence  the 
upbuilding  of  the  community  and  the  betterment  of  its 
citizens.  In  New  York  State  he  is  a  part  of  the  greatest 
Savings  Bank  system  the  world  has  ever  seen,  a  system 
with  which  it  is  my  good  fortune  to  have  temporarily  a 
somewhat  intimate  relation.  It  is  therefore  with  pride 
in  the  institutions  and  respect  for  the  trustees  that  I  ex- 
press myseK  as  fortunate  in  being  privileged  to  appear  here 
to-day. 

No  legislation  directly  bearing  on  Savings  Banks  has 
been  enacted  this  present  year.  Of  the  few  bills  relating 
to  the  subject  which  were  suggested,  only  one  covering 
segregation  of  savings  deposits  in  commercial  institutions 
had  the  sanction  of  the  Banking  Department.  No  action 
was  taken  by  the  Legislature  upon  the  measure,  but  prog- 
ress has  nevertheless  been  made  toward  the  solution  of 
a  very  important  problem.  The  Trust  Companies  Asso- 
ciation has  authorized  the  appointment  of  a  Committee  to 
confer  about  the  matter  with  the  Superintendent  of 
Banks,  and  any  Committee  that  may  be  selected  by  the 
State  Bankers'  Association,  and  would  doubtless  welcome 
being  joined  in  their  deUberation  by  a  Committee  from 
your  Association,  should  you  care  to  appoint  one. 

As  I  am  here  solely  because  of  my  official  position,  it 
will,  perhaps,  be  well  for  me  to  refer  again  to  a  condition 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   495 

affecting  the  Savings  Banks  of  our  State,  set  forth  in  my 
recent  report  to  the  Legislature.  Permit  me  to  say  at  the 
outset  of  these  remark  that,  contrary  to  intimations  re- 
cently published,  I  have  no  wish  to  dictate  the  policy  to 
be  adopted  by  your  institutions.  In  my  humble  opinion 
that  is  not  the  province  of  the  Superintendent  of  Banks. 

The  large  gain  in  Savings  Bank  deposits  during  the  year 
1909  has  been  called  to  your  attention,  and  I  need  not 
dwell  upon  that  marvellous  growth.  At  the  same  time 
the  amount  of  interest  paid  depositors  was  so  great  that 
the  ratio  of  surplus  to  depositors  decreased  more  than 
one  third  of  one  per  cent.  Another  factor  which  we  can- 
not faU  to  consider  in  connection  with  this  continued  de- 
crease in  surplus  is  the  reduction  in  earnings  and  the  large 
depreciation  in  bond  values  prevalent  since  the  first  year. 

For  the  last  twenty  years  there  has  been  an  annual  de- 
crease in  the  Savings  Banks  surplus,  so  that  to-day  the 
percentage  is  less  than  one  half  of  what  it  was  in  1890. 
WhUe  this  condition  has  not  heretofore  proved  disturbing, 
I  personally  am  convinced  that  the  time  has  now  arrived 
when  steps  should  be  taken  to  prevent  a  further  reduction. 
There  can  be  no  successful  challenge  of  the  principle  that 
every  doUar  of  net  earnings  that  can  be  distributed  with 
prudence  among  the  depositors  should  be  so  distributed, 
yet  is  it  not  time  to  analyze  present  conditions  and  deter- 
mine what  real  prudence  demands?  The  first  considera- 
tion which  should  be  given  to  aU  savings  funds  is  absolute 
safety.  The  surplus  of  a  Savings  Bank  represents  its  mar- 
gin of  safety.  It  cannot  be  too  strongly  urged  that  the 
management  of  every  Savings  Bank  whose  deposits  are 
increasing  should  carry  proportionate  sums  to  its  surplus 
fund  at  every  dividend  period. 

Savings  Bank  Trustees  establish  their  institution 
through  a  fine  exhibition  of  unselfish  devotion  and  dis- 
interested philanthropy,  but  when  the  bank's  deposits 
grow,  some  trustees  are  attacked  with  the  "grow  big" 
fever.  I  believe  in  the  call  of  ambition,  but  when  men  en- 
gaged in  a  purely  philanthropic  enterprise  begin  to  scheme 


496  HISTORY  OF  THE  SAVINGS  BANKS 

how  to  take  business  away  from  what  they  call  rival  in- 
stitutions, it  is  time  to  scrutinize  their  real  motives.  Be- 
tween beneficent  institutions  organized  with  such  high 
purpose  as  the  proper  care  of  the  money  of  the  frugal  poor 
there  should  obtain  that  helpful  cooperation  which  is  in- 
herent in  true  philanthropy.  Is  it  not  important  to  your 
institution  to  see  every  Savings  Bank  in  this  State  strong 
and  prosperous?  Will  you  have  fulfilled  your  duty  to  your 
own  depositors  if  you  do  not  help  protect  them  through 
the  protection  of  the  depositors  of  every  other  Savings 
Bank  in  this  State? 

It  has  been  stated  that  ninety  per  cent,  of  our  Savings 
Banks  wish  to  reduce  their  four  per  cent,  interest  rate 
until  their  surplus  is  properly  restored,  but  owing  to  the 
refusal  of  others  to  adopt  the  same  course,  nothing  can  be 
done  It  is  hard  to  reconcile  the  attitude  of  either  side 
to  the  very  evident  duty  of  the  Savings  Bank  Trustee. 
It  is  my  opinion  that  under  present  conditions  only  a 
limited  number  of  our  Savings  Banks  are  in  a  position 
warranting  a  continuance  of  the  four  per  cent.  rate.  Yet, 
even  if  I  were  a  trustee  of  one  of  these  institutions  with 
sufficient  surplus,  I  would  consider  it  my  duty  to  the  in- 
dividual depositors  of  my  bank  to  help  strengthen  the 
whole  Savings  Bank  system  by  voting  to  reduce  the  pre- 
vaiUng  rate,  for  a  time  at  least.  Pride  in  one's  own  institu- 
tion, or  a  desire  to  get  some  one  else's  deposits,  should 
blind  no  one  to  the  conditions  which  at  present  exist. 

Gentlemen,  your  Association  owes  a  duty  to  every 
savings  depositor  in  this  State,  and  security  is  the  first 
requisite.  Every  savings  depositor  in  this  State  must 
bear  his  proportionate  share  of  the  cost  of  security.  This 
is  not  only  right  and  proper,  but  he  accepts  it  willingly  and 
cheerfully  when  he  realizes  the  need  and  is  assured  that  the 
distribution  of  what  otherwise  might  seem  a  burden  is  fair 
and  equitable. 

I  commend  this  important  question  to  your  Association 
convinced  that  you  will  give  it  your  further  earnest  con- 
sideration.    Upon  its  proper  solution  depends  the  con- 


CHARLES  E.  HANAMAN 


PRESEDENr,  igiO-II 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   497 

tinued  confidence  of  our  citizens.  No  one  in  this  room  can 
be  more  proud  of  the  wonderful  record  made  by  our 
Savings  Banks  than  I.  Because  my  position  has  given 
me  opportunity  to  know  in  some  measure  the  problems  of 
all  our  Savings  Banks  rather  than  of  one  alone,  and  be- 
cause I  desire  to  see  each  and  all  of  these  institutions  suc- 
ceed and  prosper  for  the  sole  welfare  of  the  depositor,  I 
have  been  impelled  to  speak  as  I  have  in  advocacy  of  a 
generous  conservatism. 

SAVINGS   BANK  EXTENSION 

The  following  address  was  delivered  by  Mr.  Pierre  Jay, 
formerly  Bank  Commissioner  of  the  State  of  Massachu- 
setts: 

The  figures  presented  in  the  New  York  Bank  Super- 
intendent's Report  each  year,  showing  the  steady  piHng 
up  of  deposits  in  the  Savings  Banks,  gives  one  a  tremen- 
dous idea  of  the  growth  of  our  Savings  Bank  System: 
$87,000,000  increase  last  year,  and  an  average  annual 
increase  for  the  last  five  years  of  $57,000,000.  While  this 
growth  is  most  gratifying,  what  I  want  to  discuss  with  you 
to-day  is,  whether,  while  the  banks  have  been  growing, 
the  system  has  been  expanding  and  reaching  out  into  the 
more  remote  cities  and  towns  of  the  State.  In  order  to 
bring  the  situation  clearly  before  you  I  am  going  to  present 
a  map  and  a  very  few  figures  covering  the  last  twenty 
years.  On  this  map  the  places  in  which  there  are  Mutual 
Savings  Banks  are  marked  in  blue.  I  have  only  put  one 
mark  in  Greater  New  York,  for,  otherwise,  the  whole  space 
would  be  blue,  so  many  Savings  Banks  are  there  in  this 
great  city.  You  will  note  that  29  out  of  61  counties  have 
no  Savings  Banks  within  their  boundaries.  In  1890  there 
were  119  Savings  Banks  in  the  State;  in  1910  there  are 
142,  or  an  increase  of  twenty-three  in  twenty  years. 
While  the  deposits  were  increasing  three  hundred  per  cent., 
the  number  of  banks  increased  only  twenty  per  cent., 
and  of  these  twenty-three  new  banks,  all  but  seven  were 


498  HISTORY  OF  THE  SAVINGS  BANKS 

in  Greater  New  York.  Yet  in  the  last  twenty  years  the 
State,  as  well  as  the  city,  has  been  growing  rapidly,  and 
in  looking  over  a  list  of  its  cities  and  towns  I  find  that  to- 
day there  are  thirteen  with  a  population  of  10,000  or  over 
which  have  no  Savings  Banks,  and  seventy-four  others 
having  a  population  from  10,000  down  to  2,500  which  have 
no  Savings  Bank.  But  it  is  by  no  means  certain  that 
Savings  Banks  cannot  be  successfully  established  m  places 
of  less  than  2,500  population,  for  there  are  Savuigs  Banks 
in  eleven  such  places,  with  deposits  of  nearly  $18,000,000, 
or  omitting  those  two  Long  Island  prodigies  at  Riverhead 
and  Southhold,  an  average  of  over  $900,000  to  a  bank. 
There  is  no  fixed  rule  as  to  the  size  of  the  place  in  which  a 
Savings  Bank  may  be  successfully  established.  In  each 
case  it  is  largely  a  question  of  individual  initiative. 

Proud  as  we  are  of  our  magnificent  Savings  Banks  hold- 
ing about  a  quarter  of  all  the  savings  of  the  country,  must 
we  not  admit  that  a  system  devised  to  stimulate  thrift 
which  does  not  expand  with  the  expanding  country,  and 
does  not  reach  out  into  all  communities  of  substantial 
size,  is  a  little  rigid  and  inflexible?  Of  course  there  are 
reasons  why  it  does  not  expand. 

First,  there  is  no  profit  to  be  made  by  the  organizers 
of  a  Savings  Bank,  and  a  tremendous  amount  of  inertia 
has  to  be  overcome  before  men  will  join  together  from 
purely  philanthropic  motives  to  establish  one. 

Second,  besides  the  inertia  to  be  overcome,  there  is  the 
requirement  of  the  banking  department,  and  a  very  wise 
one,  that  the  expenses  of  the  bank  must  be  guaranteed  by 
its  organizers  untU  it  is  on  its  feet  and  ready  to  allow  in- 
terest on  its  deposits. 

Third,  there  is  the  discouraging  prospect  of  an  uphill 
attempt  to  accumulate  a  surplus  while  paying  at  least 
three  and  a  half  per  cent,  interest  together  with  the 
knowledge  of  the  inevitably  weak  financial  position  of  the 
bank  during  the  first  few  years  of  its  existence. 

These  three  general  causes,  and  often  still  other  local 
causes,  doubtless  operate  to  prevent  the  establishment  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   499 

more  Savings  Banks  in  the  smaller  communities  of  the 
State. 

What  then  is  to  be  the  future  of  our  Savings  Bank  sys- 
tem? Is  it  to  stand  still  and  confess  that  its  limit  of  ex- 
pansion, though  not  of  growth,  has  been  reached,  or  can 
any  way  be  devised  to  extend  it  into  the  smaller  commu- 
nities? 

Those  who  think  that  no  such  extension  is  called  for — 
and  they  are  many — point  to  the  fact  that  Savings  Banks 
are  established  in  all  the  largest  centres,  and  that  the  mail, 
the  trolley,  and  the  train  put  every  one  in  ready  touch 
with  the  Savings  Bank  system.  If  the  train  were  a  suffi- 
cient medium  of  communication,  then  there  was  no  need 
of  establishing  the  Bank  of  Ogdensburg,  for  that  was  with- 
in three  hours'  ride  of  Watertown,  the  nearest  bank,  or  at 
Patchogue,  for  that  was  within  an  hour's  ride  of  an  existing 
Savings  Bank;  nor  was  there  any  need  of  establishing 
additional  banks  in  Greater  New  York,  for  most  of  them 
were  within  a  few  minutes  trolley  ride  of  existing  banks; 
nor,  if  the  mail  as  a  medium  were  adequate,  would  there 
be  need  of  establishing  any  new  banks  whatever.  The 
fact  is  that  the  proportion  of  deposits  by  mail  is  very 
small.  It  takes  an  ardent  saver,  indeed,  to  patronize  the 
distant  Savings  Banks  by  either  of  these  three  media.  To 
fulfil  its  function  and  to  attract  the  money  of  the  less 
thrifty,  the  Savings  Bank  must  be  brought  as  near  as  pos- 
sible to  the  people  it  seeks  to  serve. 

My  object  in  accepting  the  kind  invitation  of  your 
Secretary  to  be  with  you  this  morning  was  to  suggest 
three  ways  in  which  the  Savings  Bank  System  might  be 
extended. 

First,  in  order  to  promote  the  establishment  of  new 
banks  and  to  overcome  their  weak  financial  position  dur- 
ing their  first  few  years,  the  realization  of  which  doubt- 
less deters  many  from  organizing  banks,  the  law  might  be 
changed  so  as  to  permit  those  desiring  to  incorporate 
Savings  Banks  in  country  towns  to  put  up  a  small  amount 
of  capital,  as  a  guarantee  of  solvency,  upon  which  interest 


500  HISTORY  OF  THE  SAVINGS  BANKS 

should  be  allowed  at  the  same  rate  as  the  interest  allowed 
on  deposits,  and  which  should  be  returned  to  the  stock- 
holders as  soon  as  a  sufficient  surplus  has  been  accumu- 
lated to  make  the  capital  unnecessary.  There  is  precedent 
for  this,  I  believe,  in  the  case  of  some  of  the  mutual  life 
insurance  companies  of  this  State,  and  it  seems  to  me  both 
reasonable  and  not  in  conflict  with  the  traditions  and  prin- 
ciples of  the  Mutual  Savings  Bank  System.  The  second 
way  is  not  by  establishing  new  banks  but  by  letting  the 
existing  banks  establish  branches.  This  is  a  matter  which 
was  discussed  in  his  annual  report  more  than  once  by 
Superintendent  Kilburn,  but  I  understand  that  it  never 
took  definite  shape  in  the  form  of  a  bill  before  the  Legisla- 
ture. Branch  Savings  Banks,  though  common  abroad, 
are  rare  among  the  mutual  systems  of  this  country,  but 
there  are  a  few  examples  which  I  want  to  call  to  your  at- 
tention : 

The  Provident  Savings  Bank  of  Baltimore,  a  mutual  in- 
stitution established  twenty-five  years  ago  in  a  city  already 
well  supphed  with  Savings  Banks,  with  a  board  of  trustees 
determined  to  reach  out  for  the  smaller  deposits,  has 
twelve  branches  in  the  more  or  less  outlying  portions  of 
the  city,  where  both  deposits  and  withdrawals  may  be 
made,  and  has  some  sixty  agencies  in  drug  stores  and  other 
similar  places  where  deposits  only  may  be  made.  This 
bank  now  has  deposits  of  about  $5,000,000,  with  50,000 
depositors,  or  exactly  $100  to  an  account,  an  average  lower 
than  that  of  any  other  Savings  Bank  of  which  I  know. 
What  has  been  done  in  Baltimore  can  be  and  is  being  done 
in  other  places. 

In  Massachusetts,  in  1908,  an  amendment  to  the  law 
was  passed  permitting  the  Savings  Banks  to  establish 
branches,  for  the  receipt  of  deposits  only,  in  places  within 
fifteen  miles  of  the  main  office  of  the  bank  in  which  no 
Savings  Bank  already  existed.  The  Savings  Banks  were 
not  much  interested  in  this  amendment,  but  they  did  not 
oppose  it.  Fortunately,  a  few  came  forward  who  were 
willing  to  give  it  a  trial.     One  of  these,  the  North  Attle- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    501 

boro  Savings  Bank,  established  a  branch  in  Attleboro  some 
three  miles  away,  and  in  the  first  year  picked  up  $101,000 
there.  Some  of  this  doubtless  would  have  come  to  the 
bank  without  the  branch,  but  unquestionably  a  large 
majority  of  it  represented  money  which  the  Savings  Bank 
would  not  otherwise  have  gotten. 

But  the  test  of  this  amendment  which  to  me  is  the  most 
interesting  is  that  which  has  been  made  by  the  Lowell  In- 
stitution for  Savings.  Instead  of  maintaining  a  branch 
which  keeps  open  all  the  time,  the  LoweU  bank  decided 
to  have  the  branch  keep  open  only  on  one  afternoon  of  the 
week.  It  selected  two  small  manufacturing  villages  about 
ten  miles  from  Lowell.  In  these  two  villages,  which  are 
close  together,  there  are  three  mills,  employing  in  all  about 
five  hundred  hands.  Thursday  is  pay  day,  and  every 
Thursday  afternoon  a  clerk  of  the  Lowell  bank  goes  out  by 
trolley  to  the  mills  to  receive  deposits.  At  the  time  the 
branch  was  opened  the  bank  had  accounts  from  thirty-four 
out  of  the  five  hundred  operatives  and  their  families.  It 
now  has  235  accounts  from  them.  This  means  that,  during 
the  twenty-two  months  of  its  operation,  201  out  of  the  500 
operatives  had  opened  accounts,  practically  none  of  whom 
ever  had  a  Savings  Bank  account  before.  During  the 
first  ten  weeks  of  the  branch,  the  average  number  of  de- 
posits made  each  week  was  only  nine ;  during  the  last  ten 
weeks  the  average  has  been  thirty-three;  and  the  total 
amount  of  money  deposited  from  those  two  little  com- 
munities composed  only  of  the  mill,  the  houses  of  the  em- 
ployees, and  the  village  store,  has  been  in  all  over  $35,000. 
Could  any  more  complete  proof  be  offered  of  the  inade- 
quacy of  the  mail,  the  trolley,  and  the  train  as  means  of 
attracting  money  into  Savings  Banks  than  this  little  ex- 
tension of  Savings  Bank  facilities  into  cormnunities  whose 
citizens  had  for  years  been  in  touch  with  Lowell  by  all 
three  of  these  avenues  of  communication? 

In  this  State,  with  its  great  diversified  manufacturing 
interests,  there  must  be  dozens  of  places  where  the  Lowell 
experience  could  be  duplicated. 


502  HISTORY  OF  THE  SAVINGS  BANKS 

These  are  two  methods  of  extending  the  field  of  the  Mu- 
tual Savings  Bank,  but  there  is  a  third  and  easier  way  of 
extending  the  Savings  Bank  System  of  the  State  which  will 
bring  it  into  communities  where  the  Mutual  Savings  Bank 
has  never  dreamed  of  penetrating. 

Let  me  show  you  another  map  of  New  York  State.  Here 
again  the  Savings  Banks  are  marked  in  blue,  but  we  see 
that  those  twenty-nine  counties  and  those  scores  of  cities 
and  towns  apparently  without  Savings  Bank  facilities 
are  well  filled  up  with  red  dots  indicating  that  there 
are  either  State  or  national  banks  or  trust  companies  in 
them. 

Your  superintendent  estimates  that  these  three  classes 
of  banks  in  New  York  State  hold  three  hundred  millions  of 
savings  deposits. 

By  the  passage  of  a  single  page  of  law  all  these  banks,  al- 
ready aggressive  accumulators  of  savings  deposits,  could 
be  transformed  into  safe  investors  of  savings  deposits  and 
made  a  part  of  the  Savings  Bank  System  of  the  State.  By 
such  enactment  an  extension  of  the  system  which  would 
otherwise  require  decades  of  slow  and  toilsome  effort  can 
be  brought  about  at  once.  The  law  which  would  accom- 
plish this  is  one  which  would  permit  these  banks  to  receive 
savings  deposits,  but  require  them  to  keep  them  separate 
from  their  commercial  deposits,  and  to  invest  them  in 
loans  and  securities  which  are  prescribed  for  our  Savings 
Banks.  Both  Superintendent  Cheney  and  his  predeces- 
sor recommended  such  legislation  as  a  restrictive  measure. 
I  urge  it  confidently  as  a  constructive  measure,  the  safety 
and  practicability  of  which  has  been  proved  in  several  other 
States.  I  say  this  confidently  because  I  am  as  sure  of  its 
adoption  in  the  future  as  I  am  that  most  of  you  are  at  pres- 
ent opposed  to  it.  But  without  discussing  the  point  of  view 
from  which  the  State  banks  and  trust  companies  oppose  it,  I 
am  only  going  to  ask  you  to  lay  aside  your  particular  prej- 
udice against  it,  and  to  look  the  situation  squarely  in  the 
face,  having  in  mind  solely  the  benefit  of  the  people  of  the 
State. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    503 

What  is  the  situation?  As  I  have  shown,  and  as  the 
Superintendent  in  his  latest  report  frankly  admitted,  the 
Mutual  Savings  Bank  System  is  not  extending.  Whether 
or  not  the  law  permits  it,  the  national  banks,  the  State 
banks,  and  the  trust  companies  are  receiving  savings  de- 
posits in  one  form  or  another,  and  it  has  not  been  found 
possible,  either  in  New  York  or  in  any  other  State,  to  pre- 
vent them  from  doing  so.  If  I  remember  correctly,  Super- 
intendent Williams  said  it  was  a  question  whether  he  would 
think  it  wise  to  prevent  them  if  he  could. 

Is  there  any  valid  reason  why,  if  they  invest  savings 
deposits  safely,  they  should  not  be  permitted  to  receive 
them?  To  this  you  will  reply  that  no  competition  with 
the  Savings  Banks  should  be  permitted.  But  even  now, 
with  their  unrestricted  investments,  they  are  able  to  com- 
mand public  confidence  sufficiently  to  compete  with  you, 
and  yet  the  very  fact  that  their  investments  are  unre- 
stricted adds  to  the  severity  of  the  competition  and  makes 
it  dangerous,  both  for  your  depositors  and  for  their  own. 
The  present  restriction  on  the  use  of  the  word  "savings" 
not  only  does  not  prevent  the  competition  with  the  Savings 
Banks  which  it  was  designed  to  prevent,  but  it  actually 
fosters  unfair  and  unsafe  competition.  From  the  Savings 
Banks  point  of  view  it  seems  to  me  that  the  way  to  make 
the  competition  fair  and  safe  is  to  abandon  the  idea  that 
you  can  stop  it,  and  to  take  up  the  idea  of  regulating  it  by 
putting  your  competitors  on  the  same  footing  as  yourselves 
in  regard  to  the  investment  of  savings  deposits.  Then  they 
cannot  make  any  more  profit  out  of  their  savings  deposits 
than  you  can,  and  having  stockholders  to  provide  divi- 
dends for,  they  will  soon  reduce  the  interest  they  pay  to  a 
level  which  will  leave  a  profit  for  them.  Thus  the  com- 
petition in  interest  rates  will  be  checked,  and  we  shall  see 
Savings  Bank  surpluses  gradually  return  to  those  percent- 
ages which  prevailed  ten  or  fifteen  years  ago. 

But,  you  may  say,  if  capitalized  banks  are  permitted  to 
do  a  Savings  Bank  business  no  more  Mutual  Savings 
Banks  will  be  organized.    The  possibility,  though  not  the 


504  HISTORY  OF  THE  SAVINGS  BANKS 

certainty,  of  this  must  be  frankly  acknowledged;  but  I 
cannot  see  that  any  one  would  be  injured  thereby,  for  if  the 
capitalized  banks  are  made  safe  Savings  Banks,  it  is  of 
little  importance  to  the  people  of  a  given  community 
whether  they  put  their  savings  in  a  mutual  or  a  stock  bank. 
Operating  under  a  uniform  investment  law,  and  supervised 
by  the  splendid  Banking  Department  of  the  State,  who  can 
sa}^  that  both  would  not  be  equally  safe? 

I  will  not  take  up  your  time  by  discussing  whether  it  is 
practicable  for  a  bank  to  do  both  savings  and  a  commercial 
business.  It  is  enough  to  say  that,  under  the  safeguards  I 
have  suggested,  it  has  been  found  practicable  in  New 
Hampshire  since  1891,  in  Michigan  since  1893,  ^  Idaho 
since  1905,  in  Connecticut  since  1907,  in  Massachusetts, 
Rhode  Island,  and  Ohio  since  1908,  and  in  Texas  and  Cali- 
fornia for  the  last  year;  and  that  without  the  safeguards  I 
have  suggested  it  has  been  carried  on  for  many  years  in 
every  other  State  of  the  Union,  as  well  as  in  most  of  the 
Canadian  banks.  If  you  are  to  condemn  it  as  impracti- 
cable, then  you  must  condemn  substantially  the  entire 
banking  system  of  the  United  States  and  Canada,  for  an 
overwhelming  majority  of  the  banks  in  both  countries  are 
conducting  this  dual  business.  I  will  admit  that,  without 
the  safeguards  suggested,  there  are  two  elements  of  un- 
soundness in  it. 

The  first  is  that  when  complete  segregation  of  savings 
from  commercial  assets  is  not  required,  it  is  possible  in 
time  of  stress  for  a  bank,  by  requiring  sixty  days'  notice  of 
its  savings  depositors,  to  defer  their  demands  during  a 
period  in  which  the  commercial  depositors  may  drain  it  of 
its  Hquid  assets.  This  causes  uneasiness  and  distrust  be- 
tween the  two  classes  of  depositors.  The  experience  of 
Michigan  has  been  that  with  segregation  the  uneasiness 
and  distrust  disappear,  for  each  class  knows  that  whether 
its  deposits  are  payable  on  demand  or  on  time,  its  assets 
are  not  subject  to  attack  by  the  other  class.  The  second 
and  more  evident  element  of  unsoundness  is  that  unless 
the  law  requires  it,  many  banks  will  not  put  their  sa\angs 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    505 

deposits  into  the  loans  and  investments  which  have  that 
degree  of  security  considered  requisite  for  such  deposits. 

In  view  of  the  opposition  which  has  arisen  to  it  from  all 
classes  of  banks  in  this  State,  it  may  interest  you  to  know 
that  at  the  Annual  Convention  of  the  California  Bankers' 
Association,  just  prior  to  the  adoption  of  the  new  law  last 
year,  the  vote  in  favor  of  segregated  departmental  banking 
was  176  to  14.  In  Michigan,  where  it  prevails  in  nearly 
all  of  the  376  State  banks,  leading  bankers  express  thern- 
selves  enthusiastically  in  favor  of  it.  From  what  I  have 
said  concerning  this  third  method  of  extending  our  Savings 
Bank  System,  possibly  some  of  you  will  go  away  with  the 
impression  that  I  am  against  the  Mutual  Savings  Banks 
and  in  favor  of  substituting  for  them  the  discount  banks 
and  trust  companies.  Some  of  those  who  have  heard  me 
present  similar  arguments  on  this  subject,  in  States  where 
they  have  no  Mutual  Banks,  accuse  me  of  trying  to  put 
their  trust  companies  and  discount  banks  out  of  business 
and  to  substitute  for  them  the  Mutual  Savings  Bank.  So 
it  all  depends  upon  the  point  of  view.  The  fact  is,  that  I 
express  no  preference,  but  am  in  favor  of  both  systems.  I 
advocate  no  changes  in  the  law  which  are  not  based  on 
sound  banliing  principles  and  the  safe  investment  of  savings 
deposits,  but  I  am  in  favor  of  such  changes  in  the  law  as 
will  permit  any  banking  institution  complying  with  these 
two  conditions  openly  to  solicit  and  receive  savings  de- 
posits. Some  people  are  attracted  to  one  kind  of  a  bank 
and  some  to  another;  and  the  evidence  is  conclusive  that 
the  more  properly  constituted  agencies  there  are  for  the 
encouragement  of  thrift,  and  the  nearer  they  are  brought 
to  the  doors  of  the  people,  the  greater  will  be  the  volume  of 
their  savings. 

This  is  an  age  of  enterprise  and  extension.  Passive 
methods  no  longer  suffice.  In  these  days  you  do  not  have 
to  travel  to  New  York  to  buy  bonds;  the  officers  of  the 
smallest  and  youngest  of  your  banks  are  fairly  besieged  in 
their  office  by  travelling  bond  men  who  bring  the  bond 
market  to  their  doors.     So  the  Government  delivers  the 


5o6  HISTORY  OF  THE  SAVINGS  BANKS 

mail  to  the  farmer,  and  the  department  stores  deHver  then- 
goods  to  the  suburbs.  In  every  field  of  business  activity 
facilities  are  being  extended,  and  new  facilities  create  new 
business.  The  vast  telephone  traffic  of  the  country  rep- 
resents new  business;  it  decreased  the  use  of  none  of  the 
previous  means  of  communication.  The  latest  facility  in 
communication,  the  "night  letter, "  is  creating  entirely  new 
business  for  the  telegraph  companies.  A  Western  Union 
solicitor  told  me  that  one  of  his  customers  sent  25,000 
night  letters  in  sixteen  days.  In  the  field  of  banking  the 
instances  I  have  cited  prove  just  as  strikingly  that  new 
Savings  Bank  facilities  create  new  deposits.  Can  we  not 
look  to  this  powerful  Association  to  encourage  the  exten- 
sion of  the  Savings  Bank  System  into  the  smaller  commu- 
nities of  the  State,  so  that  it  may  expand  as  well  as  merely 
grow,  and  so  that  the  facilities  for  saving  money  may  in 
some  measure  keep  pace  with  the  ever-increasmg  tempta- 
tions to  spend  it? 

THE  THEORY  AND  PRACTICE  OF  SAVINGS  BANK  INSURANCE 

The  following  address  was  delivered  by  Mr.  WiUiam 
Frederick  Dix,  Secretary  of  the  Mutual  Life  Insurance 
Company : 

The  theory  and  practice  of  life  insurance  have  been  so 
scientifically  developed  during  the  last  half  century  that 
they  are  as  nicely  adjusted  to  the  needs  of  the  man  of  small 
earnings  as  they  are  to  those  of  the  capitalists.  The  most 
sagacious  business  men  in  this  country  are  the  most  liberal 
patrons  of  it,  the  multi-millionaire  is  just  as  sure  to  carry 
insurance  on  his  life  as  is  the  clerk  in  his  office,  and  to-day 
the  great  life  insurance  companies  stand  as  a  formidable 
bulwark  against  poverty.  As  a  factor  in  economics  they 
are  mighty  anchors  of  safety. 

The  question  of  Savings  Bank  insurance  is  a  most  in- 
teresting one.  In  theory  it  is  admirable.  Savings  Bank 
insurance,  as  in  vogue  to-day,  means  industrial  insurance 
with  the  elimination  of  the  agent.     Industrial  insurance 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    507 

is  expensive  because  it  is  like  buying  coal  by  the  bucket- 
ful. It  is  necessarily  expensive  because  of  the  cost  of  col- 
lecting, so  frequently,  such  small  premiums.  Not  only  is 
the  bookkeeping  in  the  home  office  enormous,  but  the  agent 
must  make  weekly  visits  to  the  insured,  and  a  much  larger 
proportion  of  premium  receipts  must  go  to  him  than  is 
necessary  in  ordinary  insurance.  Savings  Bank  insurance 
is  expected  to  do  away  with  the  large  proportionate  cost  of 
the  agent  and  give  the  insured  more  protection  for  his 
money.  It  is  devised  to  teach  the  wage-earner  to  be  prov- 
ident, and  if  it  could  teach  the  workingman  systemati- 
cally to  save  a  portion  of  his  wages,  its  influence  for  good 
would  be  enormous.  It  would  help  cure  one  of  the  great- 
est economic  evils  of  our  modem  social  industrialism.  The 
average  wage-earner  is  a  mighty  poor  investor.  Either  he 
saves  nothing,  or  through  ignorance  he  dissipates  his 
savings  in  unwise  investments.  If  he  could  be  taught  reg- 
ularly to  place  his  surplus  earnings  with  a  Savings  Bank 
which  would  not  merely  be  there  kept  for  him  in  trust,  but 
used,  as  premiums,  to  pay  for  insurance  on  his  life,  father- 
less and  poverty-stricken  families  among  the  laboring 
classes  would  largely  cease  to  exist.  Or  if  he  could  be  per- 
suaded to  put  a  certain  sum  in  the  Savings  Bank  each 
week,  and  arrange  to  have  the  bank  apply  a  portion  of  his 
funds  to  pay  premiums  on  his  life  insurance,  still  keeping 
a  steadily  growing  residue  in  the  bank,  this  plan  would  be 
still  better  because,  in  time  of  stress,  when  his  wages 
stopped  temporarily,  for  instance,  his  reserve  fund  in  the 
bank  would  prevent  his  policy  from  lapsing. 

State  Actuary  Hunter  estimates  that  Savings  Bank  in- 
surance would  cost  twenty-five  per  cent,  less  than  indus- 
trial insurance,  and  states  that  a  Savings  Bank  can  return 
to  a  policy  holder  who  is  unable  to  continue  his  premium 
payments  a  larger  percentage  of  those  premiums  than  an  in- 
dustrial company,  and  can  give  a  surrender  value  at  the 
end  of  sLx  months,  whereas  industrial  companies  do  not 
give  one  under  three  years. 

A  very  substantial  proportion  of  industrial  insurance 


So8  HISTORY  OF  THE  SAVINGS  BANKS 

policy  holders  either  lose  their  enthusiasm  within  three 
years,  or  are  forced  by  lack  of  funds  to  sacrifice  their  poli- 
cies, and  the  money  they  have  paid  into  industrial  com- 
panies in  excess  of  the  value  of  the  protection  received 
during  the  time  is  thus  an  absolute  loss  to  them.  On  the 
death  of  the  insured,  a  Savings  Bank  can  automatically 
place  the  amount  of  his  insurance  in  his  Savings  Bank  ac- 
count, thus  somewhat  removing  the  temptation  from  his 
widow  to  misuse  an  unfamiliarly  large  amount  of  cash  in 
hand.  She  would  be  less  likely  to  squander  a  Savings  Bank 
fund  than  actual  money  in  her  possession. 

On  the  theoretical  side,  it  is  hard  to  find  any  argument 
against  Savings  Bank  insurance.  The  man  of  small  wage 
commonly  believes  that  he  cannot  afford  to  carry  any  of 
the  regular  old  line  forrns  of  insurance,  and  the  small 
amount  he  could  save  would,  if  merely  left  in  the  Savings 
Bank,  hardly  suffice  to  provide  for  more  than  the  imme- 
diate needs  of  his  family  when  bereaved  by  his  death  of 
their  chief  item  of  assets.  A  wage-earner,  by  systemati- 
call}'  adding  to  his  Savings  Bank  life  insurance  for  a  number 
of  years,  could  build  up  an  insurance  estate  which  would  be 
considerable.  Theoretically,  Savings  Bank  insurance,  by 
the  elimination  of  agency  expenses,  gives  the  maximum  of 
protection  for  the  minimum  of  cost.  No  wonder  it  has 
had  the  interested  attention  of  Savings  Banks  and  large 
business  corporations  employing  numbers  of  wage-earners. 
If  any  scheme  could  be  devised  to  make  it  a  practical  suc- 
cess, it  would  become  a  tremendous  factor  for  good. 

Unfortunately,  however,  there  is  sometimes  a  great  gulf 
fixed  between  theory  and  practice,  and  that  gulf,  in  this 
case,  is  expressed  by  the  personal  equation.  The  whole 
history  of  life  insurance  seems  to  show  that  it  is  human 
nature  for  a  man  readily  to  agree  to  the  excellence  of  life 
insurance  in  general,  but  to  avail  himself  of  it  only  in  a 
moment  of  enthusiasm,  after  having  been  hauled  and  ca- 
joled and  flattered  and  frightened  into  it  by  the  resourceful 
agent.  It  is  a  fine  thing — for  the  other  fellow!  As  State 
Actuary'  Hunter  has  remarked:    "The  elimination  of  the 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    509 

collector  would  be  practically  equivalent  to  the  elimina- 
tion of  the  policy  holders."  All  attempts  to  conduct  the 
business  of  life  insurance  without  the  aid  of  agents  or  solici- 
tors have  been  virtual  failures.  Four  English  life  in- 
surance companies,  the  London  Life,  Metropolitan  Life, 
the  "Old  Equitable,"  and  the  Clergy  Mutual  have  always 
conducted  their  business  without  the  assistance  of  solicit- 
ing agents.  Of  the  companies  named,  the  Equitable  of 
London  is  the  oldest  life  insurance  organization  in  the 
world.  By  saving  agents'  commissions,  it  has  furnished 
insurance  at  somewhat  lower  net  cost  than  its  contempora- 
ries, but,  like  the  other  companies  named,  it  has  done  a 
very  small  part  of  the  life  insurance  business  of  the  world. 
After  a  career  of  147  years,  it  has  about  $40,000,000  of  in- 
surance in  force.  In  1908  it  wrote  243  policies,  and  that 
was  one  of  the  best  years  it  ever  had.  The  other  three 
companies  named  have  done  no  better. 

For  forty-one  years  the  government  of  Great  Britain 
has  conducted  an  industrial  life  insurance  business  through 
the  instrumentality  of  the  postal  department.  Its  rates 
are  even  lower  than  those  of  the  regular  industrial  com- 
panies, and  the  protection  it  offers  is  as  safe  as  the  perma- 
nence of  the  British  Empire  itself.  After  forty-one  years 
the  government  insurance  department  has  only  13,261 
policies  in  force — an  average  of  323  per  year — while  the 
total  amount  insured  is  about  $3,845,690,  or  an  average 
of  $290  per  policy !  The  insurance  costs  as  little  as,  or  less 
than,  that  offered  by  private  companies,  and  there  is  no 
question  of  safety;  but  as  no  agents  are  employed  to  solicit 
business,  comparatively  no  business  is  procured.  In  1906 
all  the  post  offices  of  the  kingdom  secured  only  641  policies 
aggregating  $140,000  of  insurance. 

Government  insurance  in  Germany  is  more  successful 
for  the  reason  that  it  is  compulsory.  Every  year  nearly 
$125,000,000  is  paid  to  sick,  injured,  infirm,  or  old  persons 
in  the  way  of  annuities  or  weekly  payments.  Of  this 
amount  $62,500,000  is  provided  for  by  employers, 
$5Ij550j000  by  contributions  of  the  insured  persons,  and 


5IO  HISTORY  OF  THE  SAVINGS  BANKS 

$12,225,000  by  the  State.  A  compulsory  system  of  in- 
surance, compelling  the  working  classes  to  contribute  a 
certain  portion  of  their  wages  to  the  general  insurance 
fund,  while  their  employers  contribute  a  larger  amount, 
and  the  wState  the  balance,  might  well  be  successful  without 
the  employment  of  solicitors,  but  the  plan  would  scarcely 
be  acceptable  in  this  country. 

The  most  successful  system  of  voluntary  life  insurance 
conducted  by  a  State  is  that  of  New  Zealand.  Here,  how- 
ever, the  government  operates  on  the  same  plan  as  the 
private  companies,  employing  soliciting  agents  and  all 
other  expedients  of  a  conservative,  well-regulated  insur- 
ance office.  Nevertheless,  the  system  has  not  been  con- 
spicuously successful  in  furnishing  protection  at  low  cost. 
While  the  cost  has  indeed  been  reasonable,  the  Australian 
Mutual  Provident  Society,  the  largest  British  Company 
in  existence,  furnishes  life  insurance  in  New  Zealand  at 
lower  cost  than  the  government  department,  and  for  some 
years  has  been  increasingits  business  at  agreater  ratio  than 
the  latter. 

The  first,  and  so  far  the  only  plan  of  Savings  Bank  in- 
surance instituted  in  this  country,  is  that  in  Massachu- 
setts. An  act  of  the  Legislature  of  that  State  passed  in 
June,  1907,  authorized  Savings  Banks  to  establish  in- 
surance departments  for  the  issuance  of  life  insurance  and 
old  age  annuity  policies.  The  purpose  of  the  law  is  to  en- 
able the  working  class  to  obtain  what  is  known  as  indus- 
trial insurance  at  lower  cost  than  the  industrial  companies 
can  furnish  it.  The  plan  was  not  received  with  favor  by 
the  banks  of  Massachusetts,  only  two  so  far  having  estab- 
lished insurance  departments.  These  are  the  Whitman 
Savings  Bank  of  Wliitman,  Massachusetts,  and  the  Peo- 
ple's Savings  Bank  of  Brockton,  Massachusetts.  Three 
other  banks,  as  well  as  numerous  manufacturing  concerns, 
department  stores,  and  other  parties  act  as  agents  to  re- 
ceive applications  and  premiums.  The  law  prohibits  the 
banks  from  employing  solicitors  or  agents  to  solicit  busi- 
ness, the  purpose  being  to  eliminate  agents'  commissions. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    511 

This  practically  is  the  only  item  of  expense  that  can  be 
saved,  except  that  the  State  pays  the  salaries  of  the  actuary 
and  medical  director  and  the  compensation  of  their  assist- 
ants, and  furnishes  stationery,  supphes,  etc.  Without 
doubt  industrial  life  insurance  could  be  furnished  more 
cheaply  if  these  expenses  could  all  be  eliminated,  provided 
that  the  people  would  not  apply  for  insurance  except  on 
the  solicitation  of  the  Hfe  insurance  agent,  and  the  ex- 
perience of  all  the  world  so  far  tends  to  prove  the  proposi- 
tion. 

The  friends  and  promoters  of  Savings  Bank  insurance 
in  Massachusetts  discovered  very  early  that  this  was  a  real 
obstacle.  Accordingly,  a  number  of  prominent  manufac- 
turers interested  in  the  enterprise  employed,  at  their  own 
expense,  experienced  canvassers  to  push  the  work  of  solicit- 
ing insurance  for  the  two  Savings  Banks.  The  dismter- 
ested  efforts  of  the  friends  of  the  measure  in  thus  endeavor- 
ing to  place  the  business  on  a  prosperous  basis  are  to  be 
commended,  but  they  are,  of  course,  in  direct  opposition 
to  the  Savings  Bank  insurance  idea,  and  are  an  illustration 
of  the  weakness  of  the  scheme.  Ultimately  the  system 
must  prosper  or  decline  on  its  own  merits. 

Now  let  us  consider  the  plan  from  the  point  of  view  of 
Savings  Banks.  Massachusetts  Savings  Bank  officials 
generally  are  opposed  to  the  experiment.  Some  of  their 
objections  are  embodied  in  the  following  abstract  from  an 
article  contributed  to  the  American  Law  Review,  by  Al- 
fred L.  Aiken,  President  of  the  Worcester  County  Institu- 
tion for  Savings,  one  of  the  leading  Savings  Banks  in  the 
State. 

"Time  alone  will  demonstrate  whether  over-the-coimter 
insurance,  so  undertaken,  can  succeed,  but  the  question  of 
the  moral  right  of  Savings  Bank  Trustees  to  undertake 
such  an  entirely  extraneous  venture,  and  the  wisdom  of 
the  commonwealth  becoming  a  contributor  to  such  a  plan, 
are  both  worthy  of  consideration  and  open  to  serious 
doubt." 

The  reason  that  the  Savings  Banks  of  Massachusetts 


512  HISTORY  OF  THE  SAVINGS  BANKS 

hold  the  high  position  that  they  do  in  the  minds  of  the  peo- 
ple of  the  State  and  the  country  is  because  of  the  absolute 
confidence,  bred  of  experience,  in  the  conservatism,  hon- 
esty, and  success  of  the  management.  Depositors  have 
placed  their  money  in  the  banks,  believing  that  by  so  doing 
they  establish  the  relation  of  beneficiary  and  trustee  be- 
tween themselves  and  the  banks'  directors  and  officers,  the 
sole  purpose  of  the  trust  being  the  careful  investment  of 
the  depositors'  funds,  that  the  interest  and  profit  arising 
therefrom  may  accrue  to  the  benefit  of  the  depositors,  and 
no  one  else.  The  very  foundation  of  this  relation  is  the 
confidence  of  the  depositor  in  the  bank. 

As  a  matter  of  fact,  the  insurer  pins  his  faith  to  the  rep- 
utation of  the  old  Savings  Bank,  and,  no  matter  how 
plainly  the  fact  is  stated  in  the  policy  that  none  of  the  five 
or  ten  or  twenty  millions  of  dollars  of  assets  are  available 
for  the  satisfaction  of  his  contract,  and  that  only  a  special 
guaranty  fund  that  shall  not  be  less  than  $25,000  is  avail- 
able for  him — he  cannot  separate  his  faith  in  his  poUcy 
from  his  faith  in  the  bank  as  a  whole.  Have  the  trustees 
of  a  Savings  Bank  any  moral  right  to  jeopardize  that  con- 
fidence and  good-will  by  the  undertaking  of  an  entirely 
extraneous  business,  and  to  risk  backing  it  with  the  bank's 
name  and  prestige,  from  which  not  one  cent  of  direct  profit 
can  accrue  to  the  depositor  as  such? 

The  answer  that  the  danger  is  small  is  not  satisfying, 
for  it  is  not  true.  There  is  a  popular  impression  which  has 
been  bravely  supported  by  the  enthusiastic  adherents  of 
the  law  under  discussion,  that  the  life  insurance  business  is 
of  necessity  an  immensely  profitable  one.  There  was  never 
a  greater  mistake  than  this.  An  investigation  of  the  facts 
is  worth  while  in  this  connection.  According  to  the  In- 
surance Year  Book  of  1908,  a  standard  pubhcation  and 
statistical  authority,  389  so-called  old  fine  life  insurance 
companies  have  been  started  in  the  United  States.  Of  this 
number,  222  have  either  retired  from  business  outright  or 
been  obliged  to  reinsure  their  risks  in  other  companies; 
twelve  were,  on  January  i,  1908,  in  the  hands  of  receivers, 


SECRETARY,  19IO-13 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    513 

so  that  approximately  sixty  per  cent,  of  the  insurance 
companies  organized  have  gone  out  of  business  in  some 
way,  leaving  but  155,  or  less  than  forty  per  cent.,  still  doing 
business.  No  better  evidence  can  be  prescribed  to  show 
the  risk  involved  in  such  an  undertaking. 

As  further  evidence  of  the  risk  as  a  real  one,  the  law 
makes  specific  provision  for  receiverships  for  the  insurance 
departments  of  the  Savings  Insurance  Banks.  Certainly 
the  sight  of  a  receiver,  winding  up  the  insurance  depart- 
ment of  a  bank  at  one  end  of  the  counter,  while  the  very 
ofi&cers,  who,  through  their  mismanagement  brought  about 
this  condition,  are  still  busily  engaged  in  managing  the 
savings  department  at  the  other  end,  would  be  a  severe 
shock  to  the  faith  of  the  most  devoted  adherent  of  the 
savings  department.  As  a  matter  of  fact,  any  one  at  all 
famiUar  with  Savings  Bank  depositors  as  a  class  knows 
that  the  injury  to  the  good-wiU  of  the  bank  would  be  in- 
calculable; an,d  this  good- will  is  one  of  its  most  valuable 
assets,  though  an  intangible  one,  an  asset  that  in  some 
cases  is  the  growth  of  almost  a  century.  Certainly  no 
trustees  have  the  right  to  risk  sacrificing  this  for  the  sake 
of  an  undertaking  acknowledged  to  be  an  experiment,  and 
from  which  the  depositors  for  whom  they  act  can  gain 
nothing. 

The  wisdom  of  the  commonwealth  contributing  all  the 
stationery  and  supplies,  and  going  into  the  pockets  of  its 
taxpayers  to  pay  for  them,  is  a  second  question  worthy  of 
consideration,  and  one  that  brings  up  the  whole  question  of 
benevolent  paternalism.  If  the  State  provides  poUcies, 
ledgers,  and  premium  receipt  books  free  of  charge  to  the 
insurer  in  its  Savings  Insurance  Banks,  why  should  it  not 
furnish  supplies  of  the  same  sort  for  the  industrious  and 
thrifty  wage-earners,  who  are  savings  depositors  in  these 
same  banks,  and  if  this  is  equitable,  and  for  the  best  of  the 
community,  where  shall  the  State  stop  in  its  benefactions? 
The  departure  is  a  radical  one.  The  old-fashioned  Mass- 
achusetts Savings  Bank  has  always  been  a  self-respecting, 
self-supporting  institution,  akin  to  the  people  who  form 


514  HISTORY  OF  THE  SAVINGS  BANKS 

its  constituency.  Have  things  come  to  such  a  pass  that  it 
and  its  thrifty  depositors  are  to  become,  even  to  a  small 
extent,  charity  wards  of  the  commonwealth? 

The  real  question  at  stake  is  whether  the  trustees  of  the 
Savings  Banks  of  the  State  are  to  so  broaden  the  interpre- 
tations of  their  trust  that  they  are  prepared  to  put  behind 
them  the  old  traditions  and  practices  on  which  has  been 
built  a  world-wide  reputation  for  soUdity  and  strength,  and 
venture  into  new  and  entirely  unknown  fields,  the  fruits  of 
which  are  at  least  problematical. 

Every  fair-minded  citizen  of  the  commonwealth  would 
welcome  any  plan  that  would  mean  cheaper  and  better  Hf  e 
insurance  for  the  thrifty  wage-earner,  but  there  are  many 
who  doubt  the  wisdom  or  fairness  of  a  plan  that  involves 
the  use  of  the  prestige  and  good  name  of  the  Savings  Banks 
for  its  support,  and  risks  that  prestige  and  good  on  the  suc- 
cess or  failure  of  any  such  experiment. 

Notwithstanding  the  employment  by  private  parties  of 
many  experienced  agents  to  soHcit  business  for  the  Savings 
Banks  of  Massachusetts,  their  efforts  can  scarcely  be  said 
to  have  been  conspicuously  successful.  The  Whitman 
Savings  Bank  began  business  on  the  2  2d  of  June,  1908,  and 
on  the  8th  of  June,  1909,  after  virtually  one  full  year,  had 
$403,790  of  business  in  force,  representing  1,131  policies. 

The  Brockton  Savings  Bank  commenced  business  No- 
vember 1, 1908,  and  on  June  8, 1909,  it  had  $303,383  insur- 
ance in  force,  represented  by  747  policies.  In  other  words, 
and  to  sum  up,  the  idea  of  Savings  Bank  insurance  was 
born  and  fostered  by  men  sincerely  interested  in  the  wel- 
fare of  the  wage-earner.  It  is  a  laudable  attempt  to  in- 
culcate thrift,  and  the  realization  of  the  desirability  for  the 
man  of  small  means  to  so  provide  for  his  family  that  it  will 
not  be  plunged  into  poverty  on  the  occasion  of  his  death. 
It  is  an  attempt  to  find  a  means  for  him  to  save  and  to  place 
his  savings  where  they  will  do  the  most  good.  It  opens  up 
a  safe  field  of  investment  for  those  who  can  lay  by  so  Uttle 
that  ordinary  securities  are  beyond  them.  As  such  it  is 
wholly  admirable. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    515 

Unfortunately,  however,  experience  shows  that  a  pecu- 
liarity of  human  nature  is  a  great  bar  to  its  practice.  Life 
insurance  m  any  form  needs  teachers  to  spread  its  gospel, 
and  teachers  cost  money.  The  agent  is  expensive,  but 
he  is  necessary.  He  is  the  teacher,  taskmaster,  and  the 
promoter,  all  in  one.  The  whole  experience  of  the  prac- 
tice of  life  insurance  throughout  the  world  demonstrates 
that  theory  and  practice  are  widely  separated,  and  that 
neither  the  Savings  Banks  nor  the  business  concerns  em- 
ploying wage-earners  have  as  yet  devised  a  scheme  where- 
by men  of  small  earnings  can  be  successfully  stimulated  to 
become  permanent  poUcy  holders  without  the  help  of  the 
agent. 


CHAPTER  XVIII 

Eighteenth  Annual  Convention — Address  of  President  Charles 
E.  Hanaman — Report  of  the  Executive  Committee — Proposed 
Celebration  of  the  Centennial  of  the  Savings  Bank  Movement 
in  the  United  States — Opposition  to  the  So-called  Grady  Bill — 
The  Association  Favors  the  Establishment  of  a  Minimum 
Surplus  by  Legislation — Address  of  Superintendent  Cheney 
of  the  Banking  Department. 

THE  Eighteenth  Annual  Convention  of  the  Associa- 
tion was  held  at  the  rooms  of  the  Chamber  of 
Commerce,  in  the  City  of  New  York,  on  Thurs- 
day, May  1 8,  191 1.  The  meeting  was  called  to  order  by 
the  President,  Mr.  Charles  E.  Hanaman,  who  said: 

ADDRESS   OF   PRESIDENT   HANAMAN 

It  gives  me  great  pleasure  to  welcome  you  to  this  our 
eighteenth  annual  meeting.  The  report  of  your  Executive 
Committee  will  acquaint  you  with  the  legislative  work 
of  the  year.  It  is  with  deep  regret  that  I  am  obhged 
to  note  the  sudden  death,  during  the  summer,  of  your 
late  Treasurer,  Samuel  D.  Styles,  whose  most  efficient  ser- 
vice for  ten  years  or  more  deserves  an  expression  of  appre- 
ciative recognition.  By  virtue  of  the  authority  given  by 
Article  VI  of  our  by-laws,  the  Executive  Committee  ap- 
pointed Mr.  Frank  M.  Hurlbut,  President  of  the  Union 
Square  Savings  Bank,  to  fill  the  vacancy  due  to  the  death 
of  Mr.  Styles. 

A  number  of  articles  have  appeared  in  the  public  prints 
during  the  year  relative  to  the  shrinkage  of  the  percentage 
of  the  market  value  surplus  to  the  deposits  in  the  Savings 
Banks  of  the  State,  the  cause  of  this  shrinkage  in  addition 

S16 


HISTORY  OF  THE  SAVINGS  BANKS  ASSOCIATION     517 

to  that  produced  by  the  decHne  in  the  market  value  of  the 
securities  in  which  our  assets  are  invested  being  the  pay- 
ment to  depositors  of  an  excessively  high  interest  rate.  It 
will  be  remembered  that  at  our  meeting  a  year  ago  both 
the  present  speaker  and  the  Superintendent  of  Banks 
urged  most  earnestly  that  our  trustees  assume  a  more  con- 
servative attitude  in  this  regard,  and  reserve  a  larger  por- 
tion of  their  earnings  for  the  surplus  fund,  in  order  to 
maintain  the  high  protective  power  which  has  always  char- 
acterized the  Savings  Banks  of  the  Empire  State. 

A  number  of  banks  gave  heed  to  this  advice,  among 
them  being  several  of  the  largest  and  strongest  banks  in  the 
City  of  New  York.  It  seems  to  me  that  the  failure  of  a 
large  number  of  our  institutions  to  follow  suit  may  be  due 
in  some  measure  to  a  confusion  of  mind  as  to  the  meaning 
and  real  import  of  the  term  surplus. 

There  are  four  forms  in  which  the  surplus  of  a  Savings 
Bank  may  be  stated:  First,  the  surplus  based  on  the  in- 
vestment value  of  the  bank's  securities;  second,  the  sur- 
plus based  on  the  par  or  face  value  of  its  securities;  third, 
the  surplus  based  (as  required  by  section  1 54  of  the  Bank- 
ing Law)  on  the  par  and  market  value  of  the  securities,  in 
which  securities  seUing  at  par  or  over  are  estimated  at  par, 
while  securities  seUing  below  par  are  estimated  at  their 
market  value ;  fourth,  the  surplus  based  upon  their  market 
value  alone. 

For  practical  purposes  the  four  forms  may  be  reduced  to 
two,  viz.:  investment  value  surplus,  and  market  value 
surplus.  The  first,  or  investment  value  surplus,  repre- 
sents the  excess  of  assets  over  liability,  when  the  value  of 
the  former  is  determined  by  the  "amortization"  method. 

It  goes  without  saying  that  such  a  surplus  has  practi- 
cally no  protective  value.  It  is  in  large  measure  an  earning 
surplus  and  represents  the  portion  of  invested  assets  which 
are  in  excess  of  the  liability.  But,  in  a  time  of  stress, 
when  securities  must  be  sold  to  meet  the  demands  of  de- 
positors, it  at  once  gives  place  to  that  margin  of  safety 
which  is  represented  by  the  selling  value  of  the  securities  at 


5i8  HISTORY  OF  THE  SAVINGS  BANKS 

the  moment.  And  this  brings  us  to  the  second  form  of 
surplus,  known  as  the  market  value  surplus. 

A  moment's  consideration  will  suggest  the  fact  that  this 
surplus  cannot  be  realized  nor  accurately  determined  as  a 
whole  until  the  securities  have  been  sold  and  converted 
into  cash.  But  this  surplus  can  be  estimated  from  time 
to  time  with  sufficient  accuracy  to  furnish  a  basis  for  cal- 
culating a  factor  which  will  act  as  a  reasonably  accurate 
gauge  of  the  security  of  the  depositors'  money,  viz.:  the 
percentage  ratio  which  the  selling  value  of  the  assets  bears 
to  the  liabihty. 

The  use  of  this  gauge  does  not  require  (as  some  people 
seem  to  think)  that  the  trustees  shall  be  continually  mark- 
ing up  or  marking  down  the  value  of  their  securities  with 
every  wave  or  change  in  the  investment  market,  but  it  does 
mean  that  when,  at  regular  intervals,  an  inventory  is  taken 
to  meet  the  requirements  of  our  reports  to  the  Banking 
Department,  the  position  of  this  gauge  or  marker  may  be 
noted  on  the  safety  scale,  and  the  proportion  of  the  semi- 
annual earnings  to  be  credited  to  depositors  as  an  interest 
dividend  may  be  governed  thereby. 

It  seems  to  me  to  be  simple  common  sense,  that  when 
natural  causes  beyond  the  control  of  the  trustees  are  de- 
pleting this  surplus,  that  it  is  without  question  our  duty 
to  our  depositors  to  retain  a  sufficient  amount  of  our  earn- 
ings to  keep  this  gauge  or  marker  well  above  the  danger 
line.  When  the  mercury  in  a  ship's  barometer  persists  in 
falling  below  the  30-inch  mark  the  sailing  master  begins  to 
prepare  for  a  storm.  The  storm  may  not  come,  but  the 
captain  realizes  his  responsibility  for  the  lives  aboard,  and 
to  the  owners  for  the  safety  of  the  vessel  and  its  cargo. 
In  like  manner  should  we  keep  an  eye  on  our  barometer 
and  note  at  what  percentage  mark  our  ratio-indicator 
stands,  so  that  we  may  take  in  sail  when  that  indicator 
points  to  danger  ahead,  for  we  also  are  responsible  to  our 
depositors,  who  are  owners. 

The  depletion  of  the  surplus  by  an  excessive  interest  rate 
reminds  me  of  a  story  that  is  told  of  an  old  colored  man 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    519 

who  lived  in  Washington  when  the  old  Freedman's  Bank, 
estabUshed  for  the  savings  of  colored  people,  was  in  exist- 
ence. Old  Joe  deposited  ten  dollars  in  the  bank  and,  at 
the  expiration  of  two  years,  attempted  to  withdraw  his 
money  in  order  to  meet  some  family  expense.  At  the 
paying  teller's  window  he  said:  "Mah  name  is  Joseph 
Jackson  and  I  wants  mah  ten  dollars."  "When  did  you 
put  in  dat  ten,  Mister  Jackson?"  inquired  the  teller.  ''Two 
yeahs  ago,"  replied  Joe.  "Two  yeahs  ago!"  exclaimed  the 
teller  in  astonishment.  "  Yas,  suh,"  rephed  Joe.  "Well, 
sholy.  Mister  Jackson,"  said  the  teller,  "you  ought  to 
know  dat  in  dat  time  de  intrus  done  eat  up  de  principal. 
Yor  ain'  got  no  money  lef  heah."  The  application  of  this 
btor>^  is  so  evident  that  no  comment  is  necessary. 

In  an  institution  where  the  law  requires  that  the  assets 
shall  be  kept  in  invested  form,  and  where  there  is  no  capital 
nor  stockholders'  liability,  a  margin  of  safety  or  guarantee 
fund  built  up  from  a  portion  of  the  earnings  is  a  necessity, 
for  there  is  no  other  source  from  which  protection  can  be 
looked  for  to  offset  any  depreciation  that  may  occur  in  the 
cash  value  of  those  assets.  And  it  was  this  fact  that  the 
framers  of  our  law  undoubtedly  had  in  mind  when  they 
suggested  the  accumulation  of  a  surplus  which  they  di- 
rected the  trustees  to  "hold  to  meet  any  contingency  or 
loss  in  its  business  from  the  depreciation  of  securities  or 
otherwise." 

Now  that  little  verb  "to  hold"  means  to  maintain,  re- 
member that ;  and  then  think,  have  we  kept  the  law  in  this 
respect?  When  this  law  was  framed  the  danger  was  that, 
owing  to  the  large  earnings  of  that  day,  too  large  an 
amount  would  accumulate  and  be  held  as  surplus,  and 
therefore  a  check  was  placed  upon  the  maximum  amount 
that  could  be  so  held.  It  evidently  did  not  occur  to  our 
lawmakers  that  the  time  would  come  when  commercialism 
would  compete  with  philanthropy  for  the  possession  of  our 
institutions,  and  security  stand  in  danger  of  being  lost 
sight  of  in  a  desire  for  a  large  liabiUty,  and  that  a  mistaken 
generosity  would  develop  to  a  point  where  the  surplus 


520  HISTORY  OF  THE  SAVINGS  BANKS 

would  face  the  risk  of  being  "eaten  up  by  the  interest" 
paid  to  depositors.  I  am  well  aware  that,  when  securities 
again  appreciate  in  value,  our  market  value  gauge  of 
solvency  will  ascend  the  scale,  and  then  will  be  the  time  to 
be  generous  with  our  interest  dividends. 

It  seems  to  me  that  the  only  justification  for  the  exist- 
ence of  the  trustee  or  Mutual  Savings  Bank  is  that  it 
should  afford  greater  security  to  the  depositor  than  it  is 
possible  for  the  commercial  bank  to  offer,  and  this  cannot 
be  the  case  if  the  importance  of  the  surplus  is  not  more 
highly  regarded  than  the  interest  rate.  \\Tiile  our  Savings 
Banks  are  without  capital  they  cannot  be  regarded  nor 
managed  as  commercial  institutions,  nor  were  they  ever 
intended  to  be  other  than  purely  philanthropic  in  function. 
And  this  being  the  case,  they  are  necessarily  independent 
in  the  sense  that  while  no  bank  is  the  keeper  of  any  other 
bank,  the  trustees  of  all  the  Savings  Banks  of  the  State  are  the 
keepers  of  one  common  cause  and  cannot  afford  to  assume 
an  independence  of  policy  nor  a  competitive  attitude  that 
will  be  detrimental  to  the  weakest  link  in  the  chain. 

We  hear  it  said  by  the  exponents  of  high  interest  rates : 
"Why  should  we  not  pay  these  high  rates?  We  have 
earned  them  and  our  earnings  belong  to  the  depositors,  and 
it  is  only  right  that  we  should  give  this  money  to  them." 
I  submit  that  the  legitimate  depositor  demands  of  you  the 
unquestioned  security  of  his  principal  first,  last, and  all  the 
time,  and  in  order  to  give  him  that  securit}^  you  will  have 
to  deduct  from  your  earnings  for  credit  to  his  margin  of 
safety  an  amount  that  will  offset  the  shrinkage  in  the 
market  value  of  the  securities  in  which,  by  his  order 
(through  the  law),  you  have  invested  his  deposits,  and  this 
deduction  will  cut  down  your  supposed  earnings  to  a  much 
lower  level  than  that  in  which  you  have  recently  estimated 
them. 

The  cr>'  for  higher  interest  rates  does  not  come  from  the 
legitimate  depositor,  but  from  the  investor  and  speculator 
who  is  your  depositor  only  for  the  sake  of  the  income  that 
your  mistaken  generosity  is  giving  him  at  the  expense  and 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    521 

risk  of  the  frugal  poor  who  desire  to  use  your  institution 
properly — that  is  to  say,  for  the  accumulation  and  safe- 
keeping of  their  hard-earned  savings — and  no  one,  rich  or 
poor,  should  have  enough  money  at  any  time  in  a  Savings 
Bank  for  the  income  to  be  an  object.  The  bank,  therefore, 
that  seeks  and  accepts  the  money  of  the  investor  is  fav- 
oring the  comparatively  rich  at  the  risk  of  the  poor  man, 
for  the  deposits  of  the  rich  do  not  shrink  with  the  surplus, 
and,  as  I  have  pointed  out  elsewhere,  in  a  time  of  stress  the 
investor  depositor  is  a  menace  to  the  bank  and  to  the  poor 
man's  deposit. 

I  am  unwilling  to  believe  that  any  true  man  would  be 
willing  to  knowingly  make  use  of  a  philanthropy  for  selfish 
ends,  and  if  no  selfish  ends  are  at  the  bottom  of  our  Savings 
Bank  management  to-day,  why  this  competition  on  a 
basis  so  destructive  to  all  the  principles  of  philanthropic 
endeavor?  I  believe  in  ambition  properly  directed,  but 
I  have  lived  long  enough  to  have  learned  that  misdirected 
ambition  is  sure  in  the  long  run  to  defeat  its  own  ends. 

Recent  experience  has  shown  that  the  commerciaHsm 
which  has  developed  in  the  management  of  our  institu- 
tions can  be  controlled  by  nothing  less  than  a  law.  And 
while  I  deeply  regret  that  the  warnings  that  have  been 
given  by  conservative  members  of  this  Association,  by  at 
least  two  successive  Superintendents  of  the  Banking  De- 
partment, and  through  the  public  prints  by  such  members 
of  our  commonwealth  as  are  interested  in  preserving  the 
philanthropic  character  of  our  institutions — while,  I  say, 
I  deeply  regret  that  these  warnings  have  failed  to  cause 
this  Association  to  take  the  initiative  in  placing  such  a  law 
upon  our  statute  books,  I  hope  that  you  will  not  allow  this 
meeting  to  close  without  instructing  your  Executive  Com- 
mittee to  favor  any  legislation  which  will  place  our  institu- 
tions most  firmly  upon  the  high  plane  which  is  consonant 
with  their  true  function  and  is  the  justification  for  their 
existence. 

I  have  not  held  up  for  your  admiration  the  increase  in 
deposits  during  the  past  year,  for  it  seems  to  me  that  to 


522  HISTORY  OF  THE  SAVINGS  BANKS 

grow  larger  without  a  corresponding  growth  in  strength  is 
not  a  subject  for  congratulation.  I  do,  however,  con- 
gratulate you  upon  the  evidence  of  a  return  to  right 
principles  furnished  by  the  action  of  some  of  our  largest 
and  strongest  banks,  to  which  I  called  attention  at  the  be- 
ginning of  my  remarks,  and  I  congratulate  those  banks  for 
having  avoided  the  compelling  force  of  a  law  which  is 
bound,  sooner  or  later,  to  become  a  fact,  and  I  congratu- 
late them  for  having  shown  their  appreciation  of  the  true 
function  of  a  Savings  Bank  and  the  danger  to  our  institu- 
tions of  the  commercial  tendencies  of  the  day. 

Let  us  set  before  us  an  ideal  that  will  be  high  enough,  so 
that  although  we  can  never  fully  attain  to  it,  we  may  ap- 
proach it  in  a  manner  that  will  satisfy  every  call  of  ambi- 
tion without  defeating  our  purpose  in  the  end. 

Mr.  Frank  M.  Hurlbut,  President  of  the  Union  Square 
Savings  Bank,  New  York,  was  elected  Treasurer  of  the 
Association,  September  22,  1910,  in  place  of  Mr.  Samuel 
D.  Styles,  deceased. 

ADDRESS  OF  SUPERINTENDENT  O.  H.  CHENEY 

I  appreciate  very  much  the  kindly  thought  of  your  Presi- 
dent in  calling  upon  me  and  for  this  evidence  of  your 
friendly  consideration.  I,  however,  came  to  this  meeting 
not  expecting  to  say  anything.  If  I  had  thought  that  I 
might  have  been  called  upon,  perhaps  I  might  have  gotten  a 
sermon  which  I  understand  was  preached  a  number  of  years 
ago  by  a  gentleman,  from  the  text,  *'We  are  here  to-day 
and  gone  to-morrow."  In  fact,  any  one  might  have 
tossed  a  coin  as  to  the  opportunity  which  might  be  afforded 
me  to  be  present  here  to-day,  but  I  want  to  say  to  you, 
gentlemen,  now  that  I  am  here — and  those  of  you  who 
know  me  I  perhaps  do  not  need  to  say  it  to — that  there  is 
nothing  that  interests  me  more  than  the  problem  which 
is  presented  by  the  Savings  Banks  and  their  condition  in 
this  State  to-day.     I  think  we  have  the  finest  system 


FRANK  MOSLEY  HURLBUT 


TREASURER,  igll 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK   523 

known  in  the  history  of  the  world,  and  I  agree  heartily 
with  the  proposition  that  we  have  the  finest  Savings  Bank 
Law  in  the  world.  Through  official  connection  I  have  had 
opportunity  to  ascertain,  for  my  own  benefit,  and  for 
the  purposes  of  the  department,  something  of  the  work, 
the  unselfish  work,  that  is  being  done  by  the  Savings  Bard: 
men  and  their  trustees  in  this  State,  and  it  is  a  record  that 
the  State  itseh  will  never  be  able  thoroughly  to  under- 
stand, because  it  will  not  have  the  opportunity  to  get  at 
all  the  facts.  However,  if  I  should  say  anything  to  you 
to-day  of  import,  it  would  perhaps  be  somewhat  of  a  rep- 
etition of  what  I  had  the  opportunity  of  saymg  to  you  a 
year  ago,  because  further  experience  has  confirmed  me  in 
my  belief  that  the  time  has  arrived  when  the  Savings 
Banks  Association  of  this  State  should  take  some  action 
upon  the  problem  which  is  presented  to-day.  I  am  glad 
to  see,  gentlemen,  that  your  President  has  prepared  for  an 
executive  session  this  afternoon.  I  hope,  Mr.  President,  I 
shall  have  the  opportunity  to  attend  that  session.  I  am 
ver>'  anxious  to  hear  what  may  be  said  this  afternoon  upon 
a  subject  which  is  of  interest  to  all  of  us.  I  beheve  that 
it  is  a  subject  that  we  must  meet,  and  I  earnestly  call  to 
your  attention  the  importance  of  meeting  it  fairly  and 
squarely  and  not  dodging  anything. 

Gentlemen,  I  appreciate  this  opportunity  of  saying  just 
a  word  to  you  again.  My  interest  in  the  Savings  Banks 
of  this  State  shall  always  remain,  and  I  shall  always  look 
with  pleasure  upon  the  opportunities  that  have  been  af- 
forded me  to  become  acquainted  with  you  who  manage  so 
successfully,  so  vigorously,  and  so  unselfishly  the  interests 
of  the  savings  depositors  of  this  State. 

CENTENNIAL    OF    THE    SAVINGS    BANK   MOVEMENT    IN    THE 
UNITED   STATES 

Mr.  Lersner,  of  the  Williamsburgh  Savings  Banks,  said: 

The  question  of  the  centennial  of  Savings  Banks  in  this 
country  was  possibly  induced  more  by  the  fact  that  our  in- 


524  HISTORY  OF  THE  SAVINGS  BANKS 

stitution  was  represented  at  the  now  memorable  centenary 
last  year,  held  in  Edinburg,  Scotland,  from  which  an  im- 
mense amount  of  good  was  derived,  and  it  gives  me  great 
pleasure  to  offer  this  resolution  and  move  its  adoption: 

Whereas,  The  year  191 6  will  witness  the  Centennial  of 
the  Savings  Bank  movement  in  the  United  States,  and 
whereas,  this  movement  has  been  attended  with  results  so 
beneficial  to  the  community,  the  individual,  and  the  na- 
tion, therefore,  be  it 

Resolved,  That  it  be  the  sense  of  this  meeting  that  the  one 
hundredth  anniversary  of  the  introduction  of  the  Savings 
Banking  into  this  country  should  be  properly  commemo- 
rated during  the  above  named  year,  and  that  a  Committee 
be  appointed  to  act  in  the  matter  in  conjunction  with  the 
Savings  Banks  Section  of  the  American  Bankers'  Associa- 
tion, and  New  York  Chapter  American  Institute  of  Bank- 
ing; and  that  the  Philadelphia  Savings  Fund  Society,  the 
Provident  Institution  for  Savings  of  the  Town  of  Boston, 
the  Bank  for  Savings  in  New  York,  and  the  Savings  Bank 
of  Baltimore,  the  first  four  American  Savings  Banks,  be 
requested  to  unite  in  this  movement,  to  the  end  that  this 
event  may  be  celebrated  in  a  manner  becoming  its  im- 
portance. 

The  resolution  was  adopted  by  a  unanimous  vote. 


OPPOSITION   TO   THE   GRADY   BILL 

Mr.  Hurlbut  offered  the  following  resolution  in  connec- 
tion with  Mr.  Miller's  report  upon  the  so-called  Grady 
Bill  in  the  Senate: 

Resolved,  That  the  Savings  Banks  Association  oppose 
the  Grady  Bill,  Senate  Bill  No.  1608,  in  its  present  form, 
and  urge  that  no  action  be  taken  upon  the  same  at  this 
session  of  the  Legislature,  owing  to  the  fact  that  the  session 
is  too  far  advanced  to  permit  deliberate  action. 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    525 

This  motion  being  duly  seconded,  was  put  and  carried. 
Mr.  Mills  offered  the  following: 

Resolved,  That  the  Savings  Banks  Association  of  the 
State  of  New  York  favor  the  estabhshment  of  a  minimum 
surplus  by  legislation,  and 

Resolved,  That  the  counsel  for  the  Association  be  in- 
structed to  embody  in  the  form  of  bills  such  suggestions  as 
maybe  made  for  carrying  into  effect  the  foregoing  resolution, 
and  submit  them  to  a  special  meeting  of  the  Association. 

This  was  duly  seconded  and  adopted. 

"the  safe  and  sane  rate  of  interest" 

Mr.  James  H.  Manning  said:  I  am  not  one  of  those  who 
have  been  referred  to  by  the  President  as  boiling  over  to 
say  something,  but  I  believe  as  delegates  representing  the 
great  Savings  Bank  System  of  the  State  of  New  York  it  is 
our  duty  to  take  up  and  discuss,  as  suggested,  some  sub- 
ject or  subjects  of  interest  and  importance  to  our  institu- 
tions. I  have  attended  at  least  six  of  these  conventions, 
and  while  the  proceedings  have  been  interesting  and  in- 
structive, it  has  occurred  to  me  that  there  has  been  an 
absolute  indifference  to  the  discussion  of  questions  that 
confront  us  at  all  times  while  performing  our  duties  as 
officers,  and  which  to-day  are  more  vital  than  they  have 
been  in  the  past.  I  have  been  a  silent  member,  and  silence 
is  usually  construed  as  giving  consent.  Things  have  trans- 
pired that  have  not  met  with  my  approval,  but  I  raised  no 
voice,  and  I  fear  very  much  that  my  case  is  the  case  of  a 
good  many  who  gather  once  a  year  in  this  beautiful  Cham- 
ber of  Commerce.  I  do  not  propose  to  take  up  what 
would  be  considered  a  constitutional  question  as  to  whether 
you  and  your  respective  banks  have  a  right  or  not  to  pay 
four  per  cent.,  or  only  three  and  a  half  per  cent.;  but,  in 
line  with  what  the  late  Superintendent  of  Banking  has 
said  to  us,  the  time  has  arrived  when  the  Savings  Banks 
of  the  State  of  New  York  must  take  an  offensive,  not  a 


526  HISTORY  OF  THE  SAVINGS  BANKS 

defensive,  position.  Banking  is  divided  into  three  classes 
wliich  are  just  as  distinctive  as  classes  can  be:  the  dis- 
count banks,  the  trust  companies,  and  the  Savings  Banks. 
Now  I  know  that  in  addressing  you  I  am  speaking  to 
Savings  Bank  officers,  quite  a  few  of  whom  are  also  dis- 
count bank  directors  and  trust  company  trustees.  I 
respect  you  for  the  various  positions  you  hold  in  financial 
circles,  but  I  contend  we  should  consider  matters  here  to- 
day from  purely  a  Savings  Bank  standpoint.  It  is  our 
duty  not  merely  to  attend  the  annual  convention  of  this 
Association  and  listen  to  addresses  or  papers  that  are  cer- 
tain to  be  interesting,  but  it  is  mcumbent  upon  us  to  be 
at  our  banks  the  regular  number  of  working  hours  each 
day,  and  to  see  that  the  savings  entrusted  to  our  care  are 
protected  in  every  sense  against  the  inroads  that  may  be 
made  by  banks  of  discount  or  trust  companies  with  which 
we  may  or  may  not  be  connected.  The  troublesome  ques- 
tion as  to  a  safe  and  sane  rate  of  interest,  as  I  remember, 
dates  back  to  about  the  time  the  trust  companies  began 
to  grow  strong.  I  do  not  blame  the  trust  companies  for 
getting  all  the  legislation  that  they  do — it  is  up  to  them  to 
protect  themselves,  to  advance  their  interests,  and  when 
we  stop  to  consider  that  in  the  State  of  New  York  they 
show,  I  believe,  this  last  year,  a  growth  of  about  thirty-six 
millions,  it  means  that  they  are  up  and  doing,  that  they 
are  working  together.  They  have  invaded  the  Savings 
Bank  field,  but  they  have  done  it  openly  and  fearlessly. 
I  do  not  blame  them,  but  I  do  blame  the  Savings  Bank 
men  of  the  State  for  being  so  backward  in  going  forward 
with  legislative  measures  that  mean  protection  to  Savings 
Bank  deposits  and  depositors. 

The  time  is  rapidly  coming,  if  it  is  not  here  now  when,  in 
order  to  get  on  a  proper  basis  in  our  reports,  we  will  have 
to  standardize  market  values  of  securities.  That  means  a 
great  deal,  gentlemen,  for  it  will  show  us  all  up  in  our  true 
light,  and  that  has  got  to  be  done  by  the  highest  body,  the 
Banking  Department  of  the  State  of  New  York.  It  is  up 
to  us  to  ask  that  department  to  do  it  for  the  protection  of 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    527 

all  concerned.  I  believe  evety  official  in  the  Savings 
Banks  of  the  State  of  New  York  is  an  honest  man,  but  it 
is  claimed  some  figures  that  are  presented  from  time  to 
time  in  the  way  of  reports  are  not  altogether  correct.  If 
they  were,  reports  would  not  be  frequently  returned  to 
certain  Savings  Banks  for  correction. 

I  understand  that  Mr.  George  Van  Tuyl  has  within  an 
hour  been  appointed  State  Superintendent  of  Banking. 
He  will  enter  upon  his  duties  as  a  well-trained  and  capable 
trust  company  man.  We  must  soon  let  him  know  where 
we  stand  in  regard  to  Savings  Bank  matters,  particularly 
as  to  the  standardizing  of  market  value  of  securities 
twice  a  year. 

Then,  too,  some  plan  should  be  worked  out  by  the  Ex- 
ecutive Committee  and  submitted  to  the  Superintendent 
of  the  Banking  Department  that  will  lead  to  a  better  un- 
derstanding as  to  just  how  to  base  real-estate  values  when 
taking  a  mortgage.  When  that  is  done  there  will  be  no 
occasion  for  the  remarks  that  are  now  and  then  made  to  the 
effect  that  loans  are  granted  on  a  seventy  or  eighty  per 
cent,  valuation,  when,  as  we  know,  they  should  not  ex- 
ceed sixty  per  cent. 

Those  are  some  things  that  are  vital.  As  to  the  ques- 
tion of  interest  at  the  rate  of  three  and  a  half  per  cent.,  or 
four  per  cent.,  as  I  told  you,  I  am  not  going  to  discuss  that. 
I  believe  in  the  protective  power  of  a  surplus,  and  I  am 
not  going  to  criticise  my  neighbor,  because  I  think  each 
bank,  its  officers,  and  its  board  of  trustees  will  see  that 
nothing  is  done  that  will  reflect  upon  them  and  upon  the 
great  Savings  Bank  System  of  the  Empire  State. 

Mr.  Beach,  of  the  Rome  Savings  Bank,  Rome:  I  wish 
to  state  that  I  thoroughly  agree  with  the  speaker  who  just 
preceded  the  last  speaker  in  the  fact  that  we  ought  to  take 
more  general  part  in  these  discussions,  and  that  the  more 
general  these  discussions  can  be  made  the  more  vitality 
and  more  vim  there  will  be  in  this  organization.  We  sit 
here  and  listen  oftentimes,  not  concurring  in  what  is  said 
and  what  is  done,  when  we  should  voice  what  we  really 


528  HISTORY  OF  THE  SAVINGS  BANKS 

think.  Now  I  listened  this  morning  to  a  gentleman  who 
stated  that  owing  to  the  present  excellence  of  the  Savings 
Bank  Law,  if  they  would  leave  it  alone  we  would  get  back 
the  confidence  of  the  people.  Now,  that  method  of  making 
the  statement  grated  harshly  on  my  ears,  because  I  believe 
that  the  Savings  Banks  of  the  State  of  New  York  not  only 
merit  but  have  the  unmeasured  confidence  of  the  people 
of  the  State  of  New  York.  But  because  we  have  the  best 
Savings  Bank  Law  in  the  world  does  not  mean  that  that 
law  cannot  be  better.  A  note  of  warning  was  sounded  by. 
Superintendent  Clark  WiUiams.  He  called  our  attention 
to  a  weak  spot  in  the  law,  but  the  gradual  experience  of  the 
years  has  demonstrated  the  weak  spot,  and  that  is  that  the 
law  does  not  require  and  demand  of  the  trustees  of  the 
Savings  Banks  of  the  State  of  New  York  that  they  main- 
tain a  guarantee  fund,  to  guarantee  to  their  depositors  the 
full  return  of  the  money  which  is  deposited  with  them. 
This  wedge  started  by  Superintendent  Williams  has  been 
followed  up  by  the  vigorous  methods  with  which  Super- 
intendent Cheney  has  marshalled  the  figures  and  statistics 
and  facts  which  bear  upon  this  question,  and  it  is  due  to  the 
Superintendent  of  Banks  for  us  to  voice  what  we  think 
about  these  suggestions;  and  I  would  like  to  say  that  when 
we  have  this  special  meeting,  when  this  question  is  coming 
up,  that  that  is  a  meeting  we  should  go  to,  and  thoroughly 
understand  what  we  want  to  ask  the  Legislature  to  pass 
in  the  shape  of  a  law.  There  is  a  law  of  civics  known  as 
the  line  of  least  resistance.  A  river  comes  down  a  moun- 
tain and  follows  along  down  the  valley  in  a  crooked  way 
instead  of  a  straight  way,  because  it  follows  the  line  of 
least  resistance,  but  this  body  of  intelligent  men  does  not 
need  to  follow  the  Une  of  least  resistance,  and  we  should 
not  remain  supine,  and  not  correct,  repair,  and  make  new 
this  vitally  weak  link  in  our  chain. 

REMARKS   OF   SUPERINTENDENT   CHENEY 

I  am  very  glad  to  have  another  opportunity  to  speak  to 
you.     It  so  happened  that  since  I  have  the  opportunity 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    529 

of  standing  on  the  platform  alongside  of  you,  Mr.  Chair- 
man, my  successor  has  been  confirmed  by  the  Senate. 
I  understand  that  he  takes  office  next  Tuesday,  so  you  can 
see  my  time  is  very  short.  I  therefore  appreciate  this 
chance  to  say  just  a  word  on  this  subject. 

I  am  glad  to  see  that  this  Association  is  showing  some 
signs  of  life.  It  has  been  disturbing  to  find  that  there 
were  prospects  of  your  doing  what  was  done  last  year, 
eating  a  luncheon  and  letting  it  go  at  that.  You  must 
not  be  loath  to  meet  this  subject,  for  fear  that  it  ought  not 
to  receive  the  light  of  day.  The  time  has  long  passed  when 
a  subject  of  this  kind  can  be  kept  in  the  dark.  The  public 
is  becoming  educated  in  financial  matters,  and  it  seems 
to  me  there  is  nothing  more  advisable  than  for  the  Savings 
Bank  men  to  take  up  a  subject  of  this  kind,  which  every 
one  of  us  loiows,  down  in  our  hearts,  must  be  met,  and 
meet  it  fairly  and  squarely.  I  like  the  idea  of  my  brother 
member,  that  the  members  of  the  Association  should  be 
constructive,  that  this  Association  should  do  something. 

Now,  it  was  suggested  three  months  ago,  in  the  annual 
report  of  the  Superintendent,  that  this  whole  subject 
might  be  best  reached  by  providing  a  measure  in  the  law 
which  would  compel  the  Savings  Banks  to  put  aside  in  a 
guarantee  fund  a  certain  percentage  of  the  net  profits  for 
the  six  months  period  before  declaring  dividends.  Now, 
that  would  defeat  any  necessity  for  fixing  the  amount  of 
dividends,  and  it  would  accomphsh  the  purpose  that  we 
are  all  seeking  to  accomphsh — namely,  the  building  up  of 
the  guarantee  fund.  It  is  somewhat  alarming  to  a  Super- 
intendent of  Banks  upon  his  examination  of  a  Savings 
Bank,  that,  two  years  ago,  going  back  to  the  previous 
examination,  the  institution  had  two  million  dollars  on 
deposit,  it  had  a  surplus  of  sixty  thousand  dollars,  and  on 
his  recent  examination  to  find  that  it  owed  its  depositors 
four  miUion  dollars,  and  its  surplus  fund  was  forty-eight 
thousand.  The  guarantee  fund  had  been  reduced  twelve 
thousand  dollars,  and  the  obligations  had  been  increased 
a  million  dollars.     Now  a  situation  of  that  kind  cannot 


530  HISTORY  OF  THE  SAVINGS  BANKS 

be  disregarded.  It  is  up  to  this  Association  to  take  such 
things  into  consideration.  We  cannot  go  on  bHndly  and 
indefinitely  disregarding  such  conditions,  and  therefore 
it  seems  to  me  as  an  Association  you  should  do  what  the 
Association  promises  to  do  by  its  action  this  afternoon, 
and  suggest  something  in  the  way  of  an  amendment  to  the 
present  law  that  will  meet  these  new  conditions.  Figures 
upon  that  subject  have  been  carefully  worked  out.  I  am 
not  going  to  detail  them  here  to  you,  but  it  has  seemed  to 
me  that  it  would  be  very  feasible  to  require  of  the  Savings. 
Banks  having  a  market  value  surplus  of  between  five  and 
ten  per  cent,  to  put  aside  at  each  dividend  period  five  per 
cent,  of  its  net  profits,  and  an  institution  having  a  surplus 
of  less  than  five  per  cent,  in  market  value  should  put  aside 
ten  per  cent.  If  something  of  that  sort  could  be  done,  it 
seems  to  me  it  would  be  possible  and  feasible,  and  if  that 
had  been  done  you  would  have  increased  the  surplus  last 
year,  during  1910,  about  two  and  a  half  times,  and  we 
would  be  getting  somewhere.  I  hope  that  this  Associa- 
tion will  bear  that  in  mind,  and  that  this  Committee  will 
bear  it  in  mind  as  one  of  the  suggestions  as  to  one  of  the 
possible  things  that  can  be  done  to  meet  this  condition. 

SEGREGATION 

Mr.  Hoy t :  I  would  like  to  give  a  little  useful  informa- 
tion for  this  Convention  on  the  subject  of  segregation. 
The  Committee  met  the  Superintendent,  and  he  presented 
a  tentative  bill  that  defines  the  amount  that  should  be  seg- 
regated in  a  commercial  bank  or  trust  company,  and  those 
banks  that  pay  in  excess  of  the  two  per  cent,  on  $500  or 
less.  We  discussed  that  subject,  and  finally  appointed  a 
Committee  to  aid  in  drafting  a  bill.  The  reason  I  mention 
this  is  that  I  beheve  that  will  be  the  solution  of  the  rate  of 
interest  paid  to  the  depositors  in  Savings  Banks.  A  bank 
or  trust  company  cannot  compete  with  a  Savings  Bank 
deposit,  which  should  be  a  small  deposit,  and  those  banks 
should  keep  their  reserve.  I  wish  to  call  the  attention  of 
the  Association  to  the  fact  that  there  is  a  report  of  the  law 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    531 

made  to  the  American  Bankers'  Association  that  will  give 
you  a  very  complete  account  of  the  extent  of  segregation 
that  is  going  on  throughout  the  United  States.  Massachu- 
setts, Rhode  Island,  Connecticut,  Wisconsin,  Texas,  and 
some  other  States  have  had  it  in  operation  for  ten  years. 
In  Rhode  Island  the  limit  of  a  segregated  account  is 
$3,ocK).  I  want  to  state  that  this  was  supposed  to  be  for 
the  interest  of  the  depositor,  and  was  opposed  by  the  banks 
and  trust  companies,  and  to-day  the  banks  and  trust  com- 
panies favor  the  bill,  and  would  not  have  it  repealed  for 
anything.  I  advise  every  member  to  get  that  report  for 
1910,  and  read  it.     It  is  coming  in  this  State. 

Mr.  Marcus  T.  Hun,  of  the  Albany  Savings  Bank,  of- 
fered a  resolution  that  the  Committee  which  has  been 
requested  to  report  legislation  be  requested  to  incorporate 
into  that  legislation  some  provision  which  should  be  ade- 
quate to  provide  for  a  proper  increase  in  the  surplus  of  the 
Savings  Banks  of  this  State. 

This  was  duly  seconded  and  carried. 


CHAPTER  XIX 

Nineteenth  Annual  Convention — ^Address  of  President  Hanaman — 
Amendments  Made  to  the  Constitution — The  Group  System 
Adopted — Letter  from  Bank  Superintendent  Van  Tuyl — . 
Remarks  of  Mr.  Coombs  on  Railroad  Bonds — Address  by 
Hon.  Clark  Williams,  ex-Superintendent  of  Banks,  State  of 
New  York — By-laws  Amended — The  Group  System  Adopted. 

IN  CALLING  the  Nineteenth  Annual  Convention  to 
order,  on  May  23,  191 2,  President  Charles  A.  Hana- 
man, of  the  Troy  Savings  Bank,  addressed  the  dele- 
gates as  follows: 

ADDRESS   OF   PRESIDENT   CHAS.  A.  HANAMAN 

Gentlemen:  It  is  again  my  pleasant  duty  to  welcome 
you  to  the  annual  meeting  of  our  Association,  which  is  con- 
vened here  to-day  for  the  nineteenth  time  in  its  history-. 
The  year  now  closing  has  been  replete  with  important 
topics  for  thought,  discussion,  and  effort.  I  shall  leave  to 
the  report  of  the  Executive  Committee  the  description  of 
the  legislative  work  of  the  year. 

It  is  my  sad  duty  to  make  official  announcemnent  of  the 
death  during  the  year  of  two  members  of  this  Association 
holding  official  positions.  On  the  2d  of  January  last  my 
dear  friend,  the  Treasurer  of  our  Association,  Mr.  Frank 
Moseley  Hurlbut,  President  of  the  Union  Square  Savings 
Bank  of  this  city,  died  after  a  short  illness,  to  be  followed 
on  the  I  St  of  March  by  the  death  of  Colonel  Charles  Ezra 
Sprague,  a  member  of  our  Executive  Committee  and  Presi- 
dent of  the  Union  Dime  Savings  Bank  of  New  York  City. 
The  Executive  Committee  fiUed  the  vacancies  thus  created 
by  the  appointment  of  William  H.  Rockwood,  now  Presi- 

532 


HISTORY  OF  THE  SAVINGS  BANKS  ASSOCIATION    533 

dent  of  the  Union  Square  Savings  Bank,  to  the  office  of 
Treasurer,  and  H.  P.  Brewster,  President  of  the  Rochester 
Savings  Bank  of  Rochester,  N.  Y.,  to  succeed  Colonel 
Sprague  as  a  member  of  the  Executive  Committee. 

Pursuant  to  a  resolution  passed  at  our  annual  meeting  in 
May  last  a  special  meeting  of  this  Association  was  held  at 
the  Fort  Orange  Club,  in  the  city  of  i\lbany,  N.  Y.,  on  the 
1 2th  of  January,  and  was  called  for  the  purpose  of  receiv- 
ing the  report  of  the  counsel  and  of  the  Executive  Com.- 
mittee  relative  to  the  form  of  a  bill  for  the  purpose  of 
establishing  by  law  a  minimum  market  value  surplus  in  the 
Savings  Banks  of  the  State.  SLxty-nine  banks  were  repre- 
sented at  this  meeting,  and,  after  due  discussion,  the  form 
of  the  bill  presented  by  the  counsel  and  recommended  by 
the  Executive  Committee  was  approved  by  a  vote  of  sixty- 
one  to  eight  of  the  banks  represented. 

I  shall  not  encroach  upon  the  report  of  the  Executive 
Committee  relative  to  this  subject  further  than  to  say  that 
through  the  opposition  of  members  of  this  Association 
the  bill  was  held  up  until  too  late  to  come  to  a  vote  in  the 
Legislature  before  its  adjournment.  But  permit  me  to 
point  out  that  if  this  Association  is  to  be  of  any  benefit 
to  the  Savings  Banks  of  this  State,  disloyalty  to  the  will 
of  the  majority  must  cease.  If  this  Association  cannot  go 
to  the  Legislature  with  an  unbroken  front,  it  would  far 
better  remain  away. 

Our  counsel  worked  with  his  usual  enthusiasm,  and  with 
that  rare  abihty  for  which  he  is  justly  noted,  to  place  the 
real  and  amply  acknowledged  needs  of  the  hour  in  the  form 
of  a  law  which  would,  in  large  measure,  correct  a  serious 
and  growing  evil  with  the  least  possible  hardship  to  the 
greatest  number  of  Savings  Bank  depositors,  and  with 
the  result  that,  for  the  time  being  at  any  rate,  his  efforts, 
after  they  had  become  the  will  of  the  majority  of  this 
Association,  are  held  up,  in  so  far  as  the  Legislature  of 
the  moment  is  concerned,  by  the  disloyal  acts  and  politi- 
cal influence  of  a  ver}^  small  minority.  Such  a  display 
of  the  undemocratic  spirit,  unless  checked  in  the  future, 


534  HISTORY  OF  THE  SAVINGS  BANKS 

will  soon  render  our  Association  practically  useless.  The 
usefulness  of  this  Association  depends  upon  the  loyalty  of 
the  majority  to  those  altruistic  principles  which  gave  birth 
•to  the  Trustee  Savings  Bank, 

One  of  the  chief  difficulties  to  overcome  in  making  a  law 
for  the  establishment  and  maintenance  of  an  adequate 
surplus  in  our  institutions  is  the  spirit  of  commercialism 
exhibited  in  the  competitive  importance  given  to  the  in- 
terest rate  to  depositors.  In  a  practical  experience  of 
nearly  a  quarter  of  a  century,  in  one  of  the  most  difficult 
environments  for  Savings  Bank  work  in  the  State,  I  have 
accumulated  ample  evidence  to  prove  that,  if  the  public  has 
reason  to  believe  in  the  sincerity  and  singleness  of  purpose 
of  the  trustees  of  an  institution,  and  is  properly  instructed 
as  to  the  character  of  the  work  of  that  institution,  the  in- 
terest rate  is  of  very  little  importance  as  a  competitive 
factor  between  it  and  its  commercial  neighbors,  be  they 
commercial  banks  or  commercially  managed  Savings 
Banks. 

I  am  ver}^  well  satisfied  of  the  fact  that  commercial  com- 
petition is  no  bar  to  the  establishment  or  growth  of  a  new 
Savings  Bank  in  any  environment  where  there  is  any  real 
need  for  such  an  institution. 

One  of  the  most  serious  evils  of  the  day  is  the  congestion 
of  Savings  Banks  in  small  areas,  and  while  there  are  some 
counties  in  the  State  where  no  Savings  Banks  exist,  there 
are,  on  the  other  hand,  comparatively  small  cities  where 
Savings  Banks  are  many  times  too  numerous  for  the  needs 
of  the  legitimate  Savings  Bank  depositors  of  the  neighbor- 
hood. This  unfortunate  condition  of  affairs  naturally 
leads  to  the  development  of  abnormal  and  commercial 
practices,  which  are  at  the  bottom  of  most  of  the  evils 
which  threaten  the  future  success  of  Savings  Bank  work  in 
the  State. 

Notwithstanding  the  serious  evils  with  which  commer- 
cialism has  threatened  the  highest  interests  of  our  institu- 
tions, we  have  much  to  be  thankful  for  in  the  great  good 
our  institutions  have  accomplished  and  the  growing  ten- 


WILLIAM  H.  ROCKWOOD 


TREASURER,  lgI2-I3 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    535 

dency  to  correct  the  errors  of  the  past  by  an  mcreasing 
number  of  banks.  I  have  the  utmost  faith  in  the  sincerity 
and  honor  of  the  great  majority  of  the  trustees  in  our 
Savings  Banks,  and  I  beheve  that  New  York  State  leads 
the  world  in  its  Savings  Bank  work.  With  all  its  weak 
spots,  we  have  the  best  Savings  Bank  Law  that  the  world 
has  ever  known,  and,  under  the  conditions  of  our  phe- 
nomenal growth,  our  law  is  appreciated  and  lived  up  to 
in  a  manner  that  is  worthy  of  all  praise. 

And  now,  gentlemen,  as  I  shall  retire  from  this  post  of 
honor  at  the  close  of  this  meeting,  I  want  to  express  to  this 
Association  and  to  you  my  colleagues  my  gratitude  for  and 
appreciation  of  the  high  honor  which  has  come  to  me 
through  the  bestowal  for  two  successive  terms  of  the  high- 
est ofhce  in  your  gift.  And  let  me  further  say  that  my 
retirement  from  this  office  will  not  diminish  in  the  least 
degree  my  interest  in  the  Association  nor  my  work  in  its 
behalf. 

I  thank  you  for  your  many  courtesies  and  for  your  loyal 
support. 

REMARKS   OF   HON.  CLARK  WILLIAMS 

Mr.  Clark  Williams  said :  It  was  three  years  ago  that  I 
had  the  pleasure  of  addressing  you,  then  as  Superintendent 
of  Banks,  and  I  took  occasion  and  felt  it  incumbent  upon 
me  to  give  you  advice.  Now  by  the  courtesy  of  your  offi- 
cers I  am  before  you  again,  not  as  a  State  officer,  but  as  a 
plain  citizen  striving  as  you  all  are  to  earn  an  honest  living 
and  to  do  something  worth  while.  Therefore,  I  am  not 
here  to  give  you  advice,  but  to  be  thankful  with  you  that 
I  am  no  longer  Superintendent  of  Banks. 

I  should  not  feel  an  easy  conscience,  however,  if  I  did 
not  briefly  revert  to  the  expressions  of  official  opinion  of 
the  vintage  of  1909.  Although  the  ideas  expressed  at  that 
time  may  seem  trite  to  you,  I  believe  they  are  none  the  less 
true.  I  said:  "A  knowledge  of  the  general  conditions 
throughout  the  State  compels  the  conclusion  that  the 
greatest  offence  to  economic  principles  and  sound  banking 
lies  in  the  present  high  interest  rate.     This  evil  results,  as 


536  HISTORY  OF  THE  SAVINGS  BANKS 

I  have  frequently  stated  before,  from  improper  competi- 
tion and  an  unreasoning  desire  for  quantity  rather  than 
quahty.  Deposits  are  still  a  liability  and  should  not  be 
recklessly  solicited  or  procured  by  the  offering  of  high  in- 
terest rates  at  a  sacrifice  of  safety.  The  practice  of  this 
offence  against  the  principles  of  sound  banking  is  indulged 
in  by  banks  of  discount,  by  State  and  national  banks,  as 
well  as  by  trust  companies,  largely  through  the  instru- 
mentality of  their  so-called  interest  departments.  The 
Savings  Bank,  as  we  all  know,  in  this  State  is  a  semi- 
philanthropic  institution.  It  is  created  as  the  depository 
of  the  savings  of  the  provident  poor.  No  one  can  properly 
benefit  or  profit  by  its  operations  but  the  depositors  them- 
selves. The  restrictions  laid  upon  Savings  Banks  by 
statute  are  such  as  to  require  the  safest  possible  invest- 
ments, and  the  statute  also  contemplates  the  largest 
possible  return  to  the  depositors  consistent  with  sound 
banking.  So  in  the  discussion  of  the  rate  Savings  Banks 
should  pay,  it  is  fair  to  keep  these  fundamental  principles  in 
mind.  But  what  is  the  condition  at  the  present  time  re- 
garding the  Savings  Banks  of  the  State  of  New  York?  We 
find  by  comparison  of  deposits  with  percentage  of  surplus 
which  our  Savings  Banks  have  laid  away  from  year  to 
year  a  most  remarkable  diminution.  You  are  doubtless 
familiar  with  the  statements  which  show  this  result.  Suf- 
fice it  to  say  that  on  January  i,  1890,  the  percentage  of 
surplus  to  deposits  was  seventeen  per  cent.,  and  practically 
each  year  since  that  time  there  has  been  a  decrease,  until 
it  is  now  seven  per  cent.  Wliatever  be  the  reason  for  this 
decrease  with  the  falling  rate  of  interest  on  conservative 
investments  this  disregard  of  surplus  in  the  payment  of 
high  interest  rates  would  in  time  result  disastrously  for 
depositors.  I  am  not  impressed  with  the  argument  that 
because  certain  banks  are  paying  at  the  rate  of  four  per 
cent,  (the  Big  Four)  all  should;  and,  conversely,  because 
certain  banks  are  paying  at  the  rate  of  three  and  a  half  per 
cent.,  that  all  should.  But  I  do  believe  that  so  far  as 
Savings  Banks  are  concerned  the  affairs  of  each  are  ad- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    537 

ministered  by  trustees  who  are  competent  to  discharge  the 
duties  imposed  upon  them  by  that  trust.  Conditions  in 
banks  may  differ,  and  it  is  for  the  trustees  in  every  Savings 
Bank  to  determine  for  themselves  the  proper  rate  of  in- 
terest to  be  paid  to  depositors,  taking  into  consideration, 
as  they  must,  the  absolute  safety  of  the  principal  and  the 
maintenance  of  the  proper  surplus  reserve  to  which  the 
present  depositor  may  in  fact  properly  contribute  for  the 
benefit  of  the  posterity." 

And  I  then  ventured  the  prophecy  that  because  of  the 
conservatism  which  characterizes  the  management  of  our 
Savings  Banks  there  would  be  a  general  reduction  in  in- 
terest rates.  It  was  left  for  your  determination  whether 
this  prediction  should  come  true.  If  it  is  right  that  the 
interest  rate  in  your  bank  should  be  reduced,  it  lies  with 
you  to  answer  in  your  good  judgment  in  the  interest  of 
those  who  have  entrusted  and  shall  entrust  their  savings 
to  your  care,  regardless  of  the  action  of  your  neighbor.  If 
your  institution  will  be  any  stronger  at  the  present  time 
or  in  the  years  to  come  if  you  reduce  your  rate,  it  is  clearly 
your  duty  to  adopt  that  poUcy .  This  is  enough,  gentlemen, 
of  the  vintage  of  1909,  and  my  conscience  is  satisfied.  You 
doubtless  are  tired  of  the  interest  subject,  and  I  feel  some- 
what reminiscent  to-day ;  so,  if  you  will  permit  me,  I  will 
take  you  back  to  October,  1907,  during  the  trying  days  of 
that  panic.  I  am  reminiscent  for  more  reasons  than  one; 
for,  in  describing  a  picture  which  I  shall  ask  you  to  look 
upon  for  a  moment  as  a  matter  of  Savings  Bank  history, 
I  am  compelled  to  mention  the  names  of  two  institutions. 
On  the  2ist  of  October,  1907,  I  had  comfortable  employ- 
ment as  an  executive  officer  of  the  Columbia  Trust 
Company,  and  I  expected  to  continue  in  that  capacity. 
On  the  2 2d  of  October  the  Knickerbocker  Trust  Company 
closed  its  doors.  There  has  been  a  union  of  these  com- 
panies in  the  very  recent  past,  as  you  are  aware,  and  I  may 
state  my  position  as  being  at  the  birth  of  one  and  the 
resurrection  of  the  other.  I  doubt  if  the  newspaper  men 
have  yet  determmed  that  the  union  is  a  morganatic  mar- 


538  HISTORY  OF  THE  SAVINGS  BANKS 

riage.  I  think  not;  but  it  was  just  at  that  time  that 
Governor  Hughes  asked  me  to  come  to  Albany.  I  had 
never  met  the  Governor  in  my  life  until  the  night  he  ap- 
pointed me  Superintendent  of  Banks.  I  returned  on 
Thursday,  and  received  from  Mr.  Mills  an  invitation  to 
visit  the  Dry  Dock  Savings  Bank  the  next  day ;  there  was 
to  be  a  meeting  there  of  the  Presidents  of  Savings  Banks. 
I  knew  very  little  about  Savings  Banks,  but  of  course  I 
went  there  to  learn;  and  I  recollect  on  entering  the  room 
I  heard  a  very  strong  expression  of  opinion  against  avail- 
ing of  the  sixty-day  clause.  My  neighbor  informed  me 
what  the  sixty-day  clause  meant.  It  was  stated  on  that 
occasion  that  to  avail  of  that  clause  would  result  in  dis- 
credit to  the  banking  system  as  a  whole,  and  particularly  to 
the  Savings  Banks;  that  there  was  no  occasion  for  it,  as 
it  was  evident  that  the  panic  was  practically  over  and  there 
was  no  real  reason  for  general  uneasiness.  There  were 
those  who  opposed  that  view  of  the  conditions,  and  op- 
posed them  strenuously.  I  was  asked  to  say  a  few  words, 
and,  as  I  was  about  to  express  a  half-baked  and  very  aca- 
demic opinion  on  the  question,  I  was  called  out  of  the 
room  to  the  telephone.  Upon  my  return,  at  the  risk  of 
rudeness,  I  interrupted  the  speaker  and  announced  the 
fact  which  I  had  learned  through  my  chief  examiner,  that 
the  Terminal  Bank,  the  Jenkins  Trust  Company,  the  Wil- 
Hamsburg  Trust  Company,  and  the  First  National  Bank 
of  Brooklyn  had  just  closed  their  doors.  It  was  not  more 
than  two  minutes  before  that  room  was  empty.  The  res- 
olution had  been  passed.  I  believe  it  was  on  the  25th, 
that  Friday  afternoon,  that  Savings  Banks  generally  de- 
termined to  avail  themselves  of  the  opportunity  of  post- 
poning the  demands  of  depositors. 

Then  came  a  period  within  which  the  banks  were  pre- 
paring for  resumption.  It  may  be  interesting  to  you  to 
hear  of  the  predicament  that  the  Superintendent  found 
himself  in  then.  By  that  time  I  had  learned  the  attitude 
of  the  Attorney-General's  ofhce  regarding  the  interpreta- 
tion of  statutes  generally.     I  had  learned  that  unless  there 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    539 

was  specific  permission  given  by  statute  for  Savings  Banks 
to  do  certain  things  we  could  not  consider  that  they  had 
permission,  or  that  the  statutes  were  permissive  in  any 
other  particular.  The  daily  records  of  the  department — 
which,  doubtless,  are  still  lodged  there — would  indicate 
how  many  calls  we  had  from  our  Savings  Banks  friends, 
and  I  shall  never  forget  the  friendly  advice  given  me  at 
that  time  by  those  for  whom  I  now  have  the  highest  regard 
— those  Savings  Bank  presidents  who  taught  me  the  ru- 
diments of  the  business.  It  was  at  that  time  that  a  former 
Superintendent  of  Banks  addressed  a  letter  to  me  officially 
asking  if  the  Savings  Banks  would  be  permitted  to  borrow. 
He  stated  in  that  letter  that  he  was  making  some  inquiry 
from  the  Attorney- General.  I  communicated  by  tele- 
phone with  the  Attorney-General  at  once,  requesting  that 
in  case  he  received  a  letter  with  a  certain  man's  name  at 
the  left-hand  corner  and  postmarked  on  a  certain  date 
that  he  would  not  open  it,  but  that,  if  the  letter  had  been 
opened,  he  would  kindly  withhold  his  official  opinion  for 
the  time  at  least.  I  foresaw  the  inevitable  result  of  in- 
quiry from  that  quarter  as  to  a  strict  interpretation  of  the 
law.  As  a  result.  Savings  Banks  were  permitted  to  bor- 
row, thereby  avoiding  the  sacrifice  of  depositors'  interest 
by  the  sale  of  securities  at  panic  prices.  Since  that  time 
you  all  know  that  there  is  proper  legislative  provision  for 
such  borrowing,  and  I  trust  it  will  cure  that  situation  for 
all  time  to  come. 

I  have  one  observation  to  make,  which  I  make  because 
of  my  experience  with  banks  and  with  Savings  Banks  at 
that  time,  and  I  beheve  you  will  appreciate  the  spirit  in 
which  I  make  it.  It  seems  the  poUcy  of  a  number  of 
Savings  Banks  to  rather  scatter  their  deposits  with  other 
institutions,  probably  on  the  theory  that  it  is  safer  to  have 
one's  eggs  not  all  in  a  single  basket.  I  believe  from  my 
observations  and  the  happenings  and  the  conditions  during 
the  panic  that  perhaps  the  wisest  course  would  be  to  choose 
institutions  of  undoubted  strength,  and  a  few  of  them, 
with  whom  the  bank  may  have  close  affiliations — institu- 


540  HISTORY  OF  THE  SAVINGS  BANKS 

tions  which  are  dependable  and  strong  in  any  conditions 
and  whose  management  is  appreciative  of  the  obligations 
which  are  incurred  by  the  depositary  in  the  interest  of  the 
Sa\'ings  Bank  depositor,  for  those  relations  in  times  of 
stress  are  of  the  highest  importance  to  the  interests  of  your 
institutions. 

I  have  only  one  more  thought,  and  I  do  not  know  that 
it  is  novel,  but  I  have  given  some  consideration  in  the  re- 
cent past,  and  particularly  since  the  suggestion  of  the 
Postal  Savings  Bank  idea  became  a  fact  in  practice  and 
has  not  been  successful,  so  far  as  I  know,  in  its  result  gener- 
ally in  this  State.  I.  feel  that  I  might  easily  become  a 
strong  advocate  of  the  branch  system  for  Savings  Banks 
in  the  State  of  New  York.  I  base  this  somewhat  upon  my 
experience  as  Superintendent  of  Banks  in  being  asked  to 
authorize  new  savings  institutions.  I  think  there  were 
only  three  authorized  during  the  two  years  that  I  was  in 
that  position  at  Albany.  There  is  great  danger  to  be  met 
in  supplying  a  new  community,  or  a  community  which  has 
not  had  the  Sa\dngs  Bank  privilege  at  its  door. 

The  smaller  institution  must  struggle,  and  frequently  it 
is  not  a  credit  to  the  general  Savings  Bank  System.  It  may 
be  thought  that  the  field  is  well  covered,  but  I  know  of  cer- 
tain manufacturing  communities,  thickly  populated  neigh- 
borhoods, that  have  not  the  facilities  of  a  Savings  Bank. 
The  Superintendent  of  Banks  is  hardly  justified  in  es- 
tablishing new  institutions  which,  as  I  say,  must  struggle 
for  their  existence;  but  I  can  see  the  possibility  of  large 
service  for  the  pubHc  if  the  stronger  banks  would  avail 
themselves  of  these  opportunities  and  would  lend  their 
confidence  in  the  organization  of  these  branch  insti- 
tutions in  such  localities.  I  beUeve  that  great  strength 
would  be  added  thereby  to  our  economic  structure.  I 
recommend  this  thought  for  your  consideration,  gentle- 
men, and  for  the  consideration  of  the  Superintendent  of 
Banks. 

In  closing,  I  sincerely  congratulate  you  on  the  great 
satisfaction  your  calling  must  afford  you  in  your  unselfish 


PRESIDENT,  lgl2 


HAROLD  P.  BREWSTER 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    541 

effort  in  the  interest  of  those  who  entrust  their  savings  to 
your  care. 

LETTER  FROM   SUPERINTENDENT   VAN  TUYL 

The  Secretary  received  from  Mr.  Van  Tuyl,  who  was  in- 
vited to  be  present  at  this  meeting,  the  following  letter, 
under  date  of  April  29: 

"My  dear  Mr,  Stevens:  I  wish  to  thank  you  for  your 
kind  letter  of  the  27th  instant,  inviting  me  to  attend  the 
annual  convention  of  the  Savings  Banks  Association  of  the 
State  of  New  York,  in  the  rooms  of  the  Chamber  of  Com- 
merce, New  York  City,  on  Thursday,  May  23d,  next. 

"I  can  assure  you  it  would  give  me  great  pleasure  to  be 
present  and  meet  the  members  of  your  Association,  many 
of  whom  I  have  known  for  a  long  time.  Unfortunately, 
circumstances  over  which  I  have  no  control  make  it  im- 
perative that  I  be  in  another  section  of  the  State  on  that 
day.  Therefore,  I  regret  that  it  will  be  impossible  for  me 
to  accept. 

"I  can  assure  you  that  I  wish  your  Association  all  the 
success  it  surely  deserves,  for  this  department  has  always 
been  benefited  by  the  suggestions  it  has  received  from  it. 

"With  best  wishes,  I  beg  to  remain, 
"  Very  respectfully  yours, 
(Signed)  "Geo.  C.  Van  Tuyl,  Jr., 

' '  Superintendent . ' ' 

ADDRESS   OF   PRESIDENT-ELECT   BREWSTER 

President-elect  H.  P.  Brewster,  of  the  Rochester  Savings 
Bank,  addressed  the  Convention  as  follows: 

Gentlemen :  It  is  with  a  deep  sense  of  appreciation  that 
I  accept  the  honor  which  you  have  conferred  upon  me  in 
electing  me  President  of  this  Association,  but  I  take  the 
compliment  more  as  one  offered  to  the  Rochester  Savings 
Bank,  which  I  represent,  an  institution  which,  through  its 


542  HISTORY  OF  THE  SAVINGS  BANKS 

eighty-one  years  of  active  service,  has  made  for  itself  a 
name  which  stands  to-day  unimpeachable.  We  have 
listened  with  great  interest  to-day  to  the  details  of  the 
Savings  Banks'  work  in  this  State,  and  I  shall  not  tire  you 
or  ask  your  time  to  listen  to  any  further  statistics  as  re- 
gards the  growth  of  the  institutions  which  we  represent, 
but  shall  invite  your  attention  for  a  moment  to  a  topic 
which  I  think  is  all  important  and  which  has  taken  so 
much  time  of  this  Association,  and  especially  of  the  Execu- 
tive Committee,  during  the  last  year.  I  refer  to  the  ques- 
tion of  "Legislation." 

At  our  eighteenth  annual  meeting  the  question  of  prom- 
ulgating legislation  which  should  be  for  the  benefit  of  all 
Savings  Banks  was  referred  to  a  Committee  who  later  on 
reported  to  the  Association  at  Albany  the  result  of  their 
conferences,  and,  after  free  and  thorough  discussion,  as  you 
all  know,  the  bill,  as  submitted  by  this  Committee,  was 
approved  by  the  decisive  vote  of  sixty-one  to  eight. 

Later  on  we  were  again  called  together  to  meet  with  the 
joint  committees  of  the  Assembly  and  Senate  in  the  As- 
sembly Chamber  at  Albany,  and  a  thorough  opportunity 
was  given  for  those  present  to  express  their  approval  or 
disapproval  of  the  measure.  We  are  well  aware  that  the 
resolution  passed  by  the  Association  did  not  receive  favor- 
able attention.  The  cause  for  the  inaction  on  the  part  of 
the  Legislature  in  regard  to  the  Association's  bill  is  a  mat- 
ter that  is  still  unexplained.  Be  that  as  it  may,  the  bill  died 
a  natural — or  an  unnatural — death,  and  now  we  are  prac- 
tically back  where  we  were  a  year  ago  as  regards  legisla- 
tion. 

It  seems  to  me  that  the  paramount  question  at  the  pres- 
ent time  with  this  Association  is.  Do  we  need  legislation? 
Is  it  necessary?  Cries  of  "  No!  No! "  Possibly  that  last 
sentence  should  be  changed  to  read.  Should  it  be  necessar>' 
to  have  additional  legislation?  What  has  been  the  cause 
for  suggesting  legislation?  Well,  one  of  the  causes  has  been 
the  numerous  bills  that  have  been  presented  to  the  Legis- 
lature, drawn  by  men  connected  in  their  official  capacity 


EDWIN  P.  MAYNARD 


PRESroENT,  19I3 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    543 

as  either  Senator  or  Assemblyman,  which  bills  have  been 
drawn  by  them  to  meet  certain  things  supposed  to  exist. 
If  my  opinion  is  correct,  your  Executive  Committee  has 
spent  a  large  portion  of  their  time  during  the  last  two 
years  in  opposing  improper  legislation;  and  it  was  con- 
sidered necessary,  with  the  knowledge  and  experience 
which  they  possessed,  that  they  should  formulate  some 
legislation  that  would  cover  the  ground.  This  was  done 
as  stated  before,  with  the  result,  as  is  well  known,  that  we 
remain  in  just  exactly  the  same  position  that  we  were  in  in 
1911. 

Now,  gentlemen,  I  bring  up  for  your  attention  the  an- 
swer to  the  question.  Do  we  need  legislation?  In  this 
State  we  have  one  hundred  and  forty  odd  Savings  Banks, 
organized  under  the  same  law,  granted  the  same  powers, 
and  organized  for  the  same  specific  purpose;  and,  if  my 
conception  of  their  organization  is  correct,  it  is  for  the 
purpose  of  providing  a  safe  place,  as  stated  by  Mr.  Williams 
here  to-day,  for  caring  for  the  money  of  the  thrifty.  I  do 
not  like  to  call  it  the  money  of  the — What  did  you  call 
them,  Mr.  WiUiams?  (Here  the  speaker  addressed  Mr. 
Clark  Williams,  who  was  sitting  on  the  platform.) 

Mr.  WilUams :  The  provident  poor. 

Mr.  Brewster:  I  do  not  like  that  expression  as  applied 
to  those  people.  I  think  they  are  the  bulwark  of  this 
country.  In  a  panic  these  depositors  do  not  become  un- 
necessarily alarmed.  They  believe  in  the  institution  in 
which  their  money  is  deposited,  and  are  satisfied  that  it  is 
a  much  safer  place  than  any  other  they  can  find.  As  I  say, 
my  conception  of  their  organization  is  that  it  is  for  the 
purpose  of  providing  a  safe  place  for  caring  for  the  money 
of  the  thrifty  and  safely  investing  it,  paying  to  the  depos- 
itors such  a  rate  of  interest  as  may  be  consistent  with 
safety,  and  setting  aside  such  portion  of  the  earnings  as  the 
trustees  may  decide  upon  for  a  surplus  fund.  Now,  if  this 
statement  is  correct,  then  the  words  "safety"  and  "sur- 
plus" mean  the  same.  We  all  know  that  there  is  a  great 
difference  in  regard  to  this  question  of  per  cent,  to  surplus. 


544  HISTORY  OF  THE  SAVINGS  BANKS 

It  is  an  academic  question  and  can  be  argued  from  many 
different  standpoints.  But  the  fact  remains  and  cannot 
be  gainsaid  that  the  only  safeguard  which  the  depositor 
has,  as  between  success  and  failure,  is  the  surplus,  and  it 
should  not  be  necessar^^  for  Savings  Banks  to  have  legisla- 
tion enacted  to  make  them  perform  their  duties  properly. 
There  should  be  in  the  mind  of  every  trustee  and  officer  of 
every  Savings  Bank  institution  in  this  State  such  a  desire 
to  safeguard  its  deposits  and  to  so  conduct  the  institution 
with  which  he  is  connected  as  to  make  that  feeling  of  safety 
to  the  depositor  genuine. 

The  growth  of  the  Postal  Savings  Barik,  which  pays 
but  two  per  cent,  to  its  depositors,  is  certainly  not 
based  on  the  interest  or  dividend  which  the  depositor 
receives,  but  has  been  brought  about  by  the  fact  that 
back  of  its  deposits  stands  the  great  strength  and  high 
purpose  of  the  United  States  of  America.  Unless  the 
Savings  Banks  of  this  State  can  offer  to  the  depositors 
the  same  guarantee  of  safety  as  is  offered  to  the  de- 
positors of  Postal  Savings  Banks,  then  the  time  is  not 
far  distant  when  the  usefulness  of  the  Savings  Banks 
will  be  but  a  memory.  Legislation?  No!  It  should  not 
be  necessary,  and  if  it  becomes  essential  that  new  laws  be 
enacted,  regulating  the  business  of  Savings  Banks  as  to  the 
rate  of  interest  or  dividend  which  they  may  pay,  then  the 
officers  who  have  drifted  away  from  the  purpose  for  which 
Savings  Banks  were  organized  have  no  one  to  blame  but 
themselves  if  any  hardship  may  come  to  the  institutions 
which  they  represent.  I,  therefore,  plead  to-day  not  for 
legislation,  but  for  an  honest  conception  of  the  purposes  for 
which  Savings  Banks  were  incorporated.  It  is  up  to  us, 
each  one  of  us,  to  make  it  unnecessary  to  be  continually 
discussing  the  question  of  new  laws  to  regulate  Savings 
Banks,  and  we  should  not  be  put  in  the  embarrassing  posi- 
tion of  being  called  upon  to  produce  or  to  submit  to  new 
laws.  Ever}'  effort  which  it  is  possible  for  us  to  put  for- 
ward toward  a  solution  of  the  question  of  safeguarding 
Savings  Banks  I  pledge  you  here  w  ill  be  given,  but  I  know 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    545 

nothing  can  be  accomplished  without  cooperation  on  the 
part  of  all  the  Savings  Banks,  and  no  successful  outcome 
of  this  question  can  be  had  until  such  time  as  those  gen- 
tlemen who  are  interested  in  Savings  Banks,  whose  per- 
centage is  close  to  the  danger  line,  take  such  action  as  is 
necessary-  to  make  their  institutions  sound  and  safe.  Un- 
less we  put  philanthropy  ahead  of  commercialism,  the  ex- 
istence of  Savings  Banks  is  simply  a  matter  of  time,  and  I 
submit  that  if  philanthropy— the  love  of  fellowmen,  the 
high  ideal  for  which  these  institutions  were  created — is 
maintained,  then  discussions  like  this  and  what  has  oc- 
curred during  the  last  few  years  would  be  unnecessary. 
But  some  say  to  me  that  while  these  are  perhaps  the  cor- 
rect principles,  that  it  is  an  impossibiUty  to  get  all  the 
Savings  Banks  to  look  at  the  question  in  this  light.  Well, 
if  that  is  so,  I  see  but  one  thing  that  can  be  done,  and  that 
is  to  sit  patiently  by  until  things  get  to  such  a  pass  as  to 
make  a  drastic  legislation  necessary.  I  have  not  been  able 
to  discover  why  any  one  connected  with  Savings  Banks 
should  object  to  legislation  if  that  legislation  tends  to 
strengthen  his  bank.  I  have  been  told  by  men — some  of 
them  I  think  are  in  this  room — men  who  were  in  the  bank- 
ing business  before  I  was  born,  that  there  has  not  been  the 
need,  except  in  minor  instances,  for  the  organization  of 
a  Savings  Bank  in  the  State  in  the  last  twenty  years.  I 
think  probably  that  is  borne  out  by  what  was  said  by  Mr. 
Williams  to-day.  Of  course  it  has  been  suggested  that 
the  bill  regulating  the  rate  of  interest  would  increase  the 
size  of  the  larger  banks  and  automatically  wipe  out  of 
existence  the  smaller  banks.  And  I  have  been  told,  too, 
that  there  are  Savings  Banks  enough  at  present  that  are 
sound  and  which  have  the  right  principle  back  of  them  to 
care  for  all  Savings  Bank  business  that  exists.  Why,  then, 
this  great  opposition  to  safe  and  sound  methods?  Can  it 
be  that  there  are  in  this  State  Savings  Banks  that  have 
been  organized  for  the  purpose  of  creating  positions  for 
men  who  have  not  thoroughly  conceived  in  the  organiza- 
tion of  their  institutions  the  great  purpose  for  which  the 


546  HISTORY  OF  THE  SAVINGS  BANKS 

law  created  them?  I  do  not  wish  to  think  that  the  great 
Savings  Banks  of  this  State,  be  they  large  or  small,  have 
fallen  so  low  as  to  commercialize  their  business.  But  it  is 
claimed  by  some  people  that  this  is  being  done,  and  if  it 
is  true,  then  I  have  no  sympathy  for  such  a  bank,  and  I 
see  no  reason  for  the  existence  of  such  a  bank. 

We  occupy  to-day  the  position  of  temporary  trustees  of 
a  trust  fund  in  which,  outside  of  the  ordinary  expenses,  no 
man  can  honestly  make  a  dollar.  Why,  then,  if  this  ideal 
is  correct,  should  there  be  any  difference  between  the  safe 
and  sane  methods  to  be  employed?  We  do  not  need  legis- 
lation, but  if  we  receive  it,  and  of  the  kind  that  means  a 
hardship  to  many,  it  will  not  be  the  fault  of  the  Legislature, 
but  will  be  the  fault  of  those  institutions  who  have  not 
conceived  the  purpose  for  which  they  were  created. 


AMENDMENT    OF   THE    BY-LAWS — THE    GROUP    SYSTEM 
ADOPTED 

At  this  meeting  Mr.  Mills  called  attention  to  the  fact 
that  at  the  previous  convention  a  Committee  consisting  of 
Mr.  Andrew  Mills,  Mr.  Chas.  A.  Miller,  and  Mr.  Frederic 
B.  Stevens  had  been  appointed  to  revise  the  by-laws  of  the 
Association,  and  that  after  much  careful  consideration 
proposed  amendments  had  been  prepared  and  printed 
copies  of  the  same  quite  generally  circulated  among  the 
members  of  the  Association. 

Mr.  Miller,  in  explaining  the  plan,  said: 

The  plan  was  proposed  in  recognition  of  a  feeling  which 
seemed  to  be  prevalent  among  certain  of  our  members  that 
the  Association  in  its  past  history  and  at  the  present  time 
was  perhaps  too  much  of  a  close  corporation,  especially  as 
to  the  membership  of  the  Executive  Committee,  and  that 
an  opportunity  was  not  afforded  to  the  up-State  members 
especially  to  participate  in  the  discussions  and  to  assist  in 
arriving  at  conclusions  regarding  Savings  Banks  manage- 


PRESroENT.  IOT3 


WILLIAM    FELSINGER 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    547 

ment  that  they  ought  to  have.  The  matter  was  called 
quite  forcibly  to  my  attention  by  some  of  the  up-State 
members  at  the  time  of  our  special  meeting  in  Albany,  and 
this  plan  was  suggested.  The  proposed  amendment  calls 
for  five  groups  as  follows: 


Group  I — 16  counties,  12  banks,  and  deposits 
Group  2—15        "  20       " 

Group  3-23        "  34      " 

Group  4—  2        "         42       " 
Group  5-  5        "         32       " 


$161,000,000 
109,000,000 
178,000,000 
878,000,000 
291,000,000 


After  a  spirited  debate,  the  proposed  plan  was  adopted 
by  a  decisive  majority. 

Group  I. — Chairman,  John  M.  Satterfield,  Vice-Presi- 
dent American  Savings  Bank,  Buffalo;  Secretary,  David 
Hoyt,  Treasurer  Monroe  County  Savings  Bank,  Roches- 
ter; Treasurer,  John  Mackay,  Secretary  Niagara  County 
Savings  Bank,  Niagara  Falls.  Executive  Committee: 
Cassius  C.  Davy,  Attorney  East  Side  Savings  Bank, 
Rochester;  F.  W.  H.  Becker,  Treasurer  Western  Savings 
Bank,  Buffalo;  H.  S.  Hanford,  Treasurer  Rochester  Sav- 
ings Bank,  Rochester;  Harold  P.  Brewster,  member  ex- 
officio;  Robert  S.  Donaldson,  member  ex-officio. 

Group  2, — Chairman,  Clinton  T.  Rose,  President  Onon- 
daga County  Savings  Bank,  Syracuse;  Secretary,  W.  B. 
Couch,  Treasurer  Oswego  County  Savings  Bank,  Oswego; 
Treasurer,  William  H.  Meaker,  Treasurer  Cayuga  County 
Savings  Bank,  Auburn.  Executive  Committee:  Isaac  L. 
Hunt,  President  Watertown  Savings  Bank,  Watertown; 
Samuel  H.  Beach,  President  Rome  Savings  Bank,  Rome; 
Asbury  C.  Deyo,  Treasurer  Binghamton  Savings  Bank, 
Binghamton. 

Group  3.— Chairman,  James  H.  Manning,  President 
National  Savings  Bank,  Albany;  Secretary,  S.  Mitchell 


548  HISTORY  OF  THE  SAVINGS  BANKS 

Rainey,  Treasurer  Hudson  City  Savings  Institution,  Hud- 
son; Treasurer,  Charles  E.  French,  Treasurer  Amsterdam 
Savings  Bank,  Amsterdam.  Executive  Committee:  Mar- 
cus T.  Hun,  President  Albany  Savings  Bank;  Charles  E. 
Hanaman,  President  Troy  Savings  Bank;  Allen  W.  John- 
ston, Treasurer  Schenectady  Savings  Bank;  Frederic  B. 
Stevens,  member  ex-ojicio. 

Group  4. — Chairman,  Andrew  Mills,  President  Dry 
Dock  Savings  Institution,  New  York  City;  Secretary, 
George  E.  Edwards,  President  DoUar  Savings  Bank,  New 
York  City;  Treasurer,  Edward  E.  Young,  Treasurer  Peeks- 
kill  Savings  Bank,  Peekskill.  Executive  Committee: 
Thomas  M.  Mulr}'-,  President  Emigrant  Industrial  Savings 
Bank,  New  York  City;  Casimir  Tag,  President  German 
Savings  Bank,  New  York  City;  William  G.  Conklin,  Presi- 
dent Franldin  Savings  Bank,  New  York  City;  Walter 
Trimble,  member  ex-officio;  William  Felsinger,  member 
ex-officio;  William  H.  Rockwood,  member  ex-officio. 

Group  5. — Chairman,  Eugene  F.  Barnes,  President  East 
Brooklyn  Savings  Bank,  Brooklyn;  Secretary,  Henry 
Stumpf,  Cashier  German  Savings  Bank,  Brooklyn;  Treas- 
urer, George  W.  Felter,  Secretary  Greenpoint  Savings 
Bank,  Brooklyn.  Executive  Committee:  Edwin  P.  May- 
nard.  President  Brooklyn  Savings  Bank;Lindley  M.  Frank- 
lin, President  Queens  County  Savings  Bank,  Flushing; 
Charles  M.  Blydenburgh,  President  Riverhead  Savings 
Bank,  Riverhead. 


CHAPTER  XX 

Twentieth  Annual  Convention — Address  of  President  Harold  P. 
Brewster,  of  the  Rochester  Savings  Bank — Report  of  the 
Nominating  Committee  and  Election  of  Officers — Trust  Ac- 
counts Aggregating  More  than  $3,000 — Valuable  Information 
Relative  to  the  Banking  System  of  New  York — The  Banking 
Law  Revision. 

IN   OPENING  the  proceedings  of  the  Twentieth  An- 
nual Convention  of  the  Association  on  the  2 2d  day 
of  May,  1 9 13,  in  the  City  of  Nev^  York,  President 
Harold  P.  Brewster,  of  the  Rochester  Savings  Bank,  said: 

ADDRESS   OF   PRESIDENT   BREWSTER 

Mr.  President  and  Gentlemen  of  the  Association:  With 
much  pleasure  I  welcome  you  to  this,  the  twentieth  annual 
meeting  of  the  Savings  Banks  Association  of  this  State. 

The  Executive  Committee's  report  will  be  presented  to 
you,  and  I  shall,  therefore,  not  take  your  time  by  any  ref- 
erence to  it. 

During  the  past  year  there  have  been  many  important 
matters  brought  to  the  attention  of  the  Association,  the 
most  important  of  which  was  the  Banking  Department 
bills  affecting  Savings  Banks.  Of  the  numerous  bills 
which  were  introduced  by  the  department,  I  think  but 
one  needs  any  reference  on  my  part,  and  that  was  the  bill 
known  as  the  "Reserve  Bill,"  which  has  to  do  with  in- 
creasing the  market  value  surpluses  of  the  Savings  Banks 
of  this  State.  This  bill,  as  has  been  stated  both  by  the 
Legislative  Committee  and  by  Mr.  Skinner,  the  Deputy 
Superintendent,  emanated  from  the  Banking  Department, 
was  submitted  to  the  Legislative  Committee  of  the  Asso-. 

549 


5 so  HISTORY  OF  THE  SAVINGS  BANKS 

elation  for  their  approval  or  disapproval,  and  whatever 
changes  were  deemed  advisable  by  the  Legislative  Com- 
mittee were  agreed  to  by  the  department.  A  meeting  of 
the  Executive  Committee  of  the  Association  was  held,  and 
the  measure  was  approved  by  practically  a  unanimous  vote. 
Later  on  a  special  meeting  of  the  Association  was  held  at 
Albany,  at  which  time  by  a  majority  vote  the  "Reserve 
Bill "  was  approved.  A  pubUc  hearing  was  held  before  the 
joint  Committee  of  the  Senate  and  the  Assembly  on  Bank- 
ing, and  arguments  were  made  for  and  against  the  "Re- 
serve Bill."  The  condition  of  the  Savings  Banks  of  this 
State  was  thoroughly  brought  out  in  the  arguments  made, 
and  these  hearings  (as  those  of  you  who  attended  them 
will  remember)  were  listened  to  not  only  by  members  of 
the  Association  but  by  many  members  of  the  Legislature 
and  the  public  in  general.  But  the  bills,  as  you  are  all 
aware,  failed  of  passage,  and  we,  therefore,  stand  to-day, 
as  regards  legislation,  in  the  same  position  that  we  have 
for  the  last  two  years;  that  is,  as  regards  any  changes  in  the 
laws  as  they  affect  Savings  Banks. 

It  is  the  opinion  of  a  large  number  of  Savings  Bank  men 
that  the  bills  presented  by  the  department  were  moderate 
and  fair,  and  the  only  purpose  in  introducing  them  was  to 
suggest  improvements  in  the  conditions  of  the  Savings 
Banks  of  this  State,  which  the  department  felt  were  abso- 
lutely necessary.  Even  the  opponents  of  this  bill  admitted 
that  something  was  necessary,  and  that  something  should 
be  done,  but  to  come  to  any  harmonious  conclusion  in  the 
matter  seemed  to  be  impossible.  This  lack  of  harmony 
which  failed  to  prevail  is  unfortunate  as  regards  the  general 
condition  of  the  Savings  Banks,  and  it  would  seem  as 
though  such  a  condition  should  not  exist.  We  are  all,  I 
take  it,  inspired  by  high  motives  in  the  conduct  of  the 
institutions  with  which  we  are  temporarily  connected,  and 
if  this  Association  is  to  continue  as  a  benefit  to  the  Savings 
Bank  question  as  a  whole  in  this  State,  harmony  must  pre- 
vail. It  is  not  necessary  for  me  to  say  that  every  man 
connected  with  a  Savings  Bank  should  have  but  one  idea, 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    551 

and  that  is,  the  highest  possible  regard  for  the  safety  of  his 
institution. 

The  large  depreciation  in  the  market  surpluses  of  the 
Savings  Banks  of  this  State  has,  of  course,  been  caused  by 
many  conditions.  In  some  instances — in  fact,  in  a  large 
majority  of  cases — it  has  been  caused  by  a  continued  depre- 
ciation in  the  price  of  securities.  Added  to  this  (perhaps 
in  some  cases),  the  payment  of  excessive  dividends;  but 
whatever  the  cause  may  be,  the  facts  exist,  and  some  rem- 
edy must  be  found  which  will  meet  the  general  approval 
of  all  the  Savings  Banks  of  this  State  to  correct  this  un- 
fortunate condition.  Unless  this  Association  can  agree  on 
some  plan,  it  must  sooner  or  later  be  referred  to  the  mem- 
bers of  our  Legislature  to  act  for  us,  but  this  would  seem 
unfortunate.  Would  it  not  be  better  that  the  views  of  the 
men,  who  through  years  of  practical  experience  have  been 
able  to  give  the  valuable  advice  of  long  experience,  be  met 
with  respectful  attention,  not  only  on  the  part  of  the  Legis- 
lature of  the  State,  but  on  the  part  of  the  Savings  Banks 
as  a  whole? 

I  have  in  my  possession  hundreds  of  letters  from  trustees 
throughout  the  State,  men  of  abihty  and  intelligence,  who 
appreciate  the  fact  that  there  can  be  no  division  of  re- 
sponsibihty  as  between  the  officers  and  trustees,  but  that  an 
attitude  of  cooperation  should  exist,  and  that  the  officers  of 
the  Savings  Banks  in  this  State  should  perhaps  take  into 
their  confidence  and  more  thoroughly  explain  and  counsel 
with  their  co-trustees. 

The  group  meetings  which  have  been  held  during  the 
last  year  have,  in  my  judgment,  been  a  most  excellent 
means  of  drawing  into  closer  relationship  all  of  the  Savings 
Banks  of  the  State.  Much  was  expected  in  the  change  in 
the  Constitution  which  made  these  groups  possible,  and  I 
believe  much  good  has  been  done,  for  certainly  many  men 
have  expressed  themselves  more  fully  and  freely  than  they 
have  ever  been  known  to  do  at  a  meeting  of  the  Associa- 
tion. 

This  organization,  which  is  the  custodian  of  the  enor- 


552  HISTORY  OF  THE  SAVINGS  BANKS 

mous  fund  of  the  provident  poor  of  this  State,  has  a  right 
to  expect  from  the  men  who  are  in  charge  of  these  institu- 
tions the  highest  ideals  as  regards  their  positions  and  the 
work  which  they  are  expected  to  perform.  This  Associa- 
tion should  be  all  powerful  in  working  toward  the  harmony 
of  all  of  the  Savings  Banks  of  the  State.  Nothing,  how- 
ever, can  be  accomplished  without  harmony,  and  that 
harmony  must  be  real  and  genuine.  I  think  that  a  large 
majority  of  us  feel  that  in  favoring  or  opposing  legislation 
we  should  have  in  mind  the  whole  situation  rather  than 
some  bill  that  will  affect  the  particular  institution  with 
which  you  or  I  may  be  connected. 

Differences  of  opinion  as  to  methods  have  existed,  and 
will  continue  to  exist  to  the  end  of  the  world,  as  regards 
the  right  way  to  accomphsh  any  purpose,  and  cooperation 
on  the  part  of  all  the  members  of  this  Association  cannot 
spell  but  one  word,  and  that  word  is  ''success."  There  is  a 
right  way  and  a  proper  way  to  solve  this  great  question 
which  confronts  us,  and,  gentlemen,  this  question  is  going 
to  be  solved  in  some  way,  either  by  our  ovra  uniform  ac- 
tion or  by  legislative  action.  It  is,  therefore,  up  to  this 
Association  as  a  whole  to  not  deal  in  personalities  but  to 
join  together,  man  to  man,  in  their  determination  to  pre- 
serve, by  ever}'  legitimate  means  which  we  may  possess, 
the  good  name  and  the  great  dignity  with  which  the  Sav- 
ings Banks  have  been  honored  by  the  people  of  this  State 
in  the  years  gone  by. 

EXECUTIVE   COMMITTEE  REPORT 

The  first  meeting  of  the  Committee  was  held  at  the  Van- 
derbilt,  in  New  York  City,  on  October  14,  191 2,  and  the 
Committee  organized  by  electing  the  President  of  the 
Association  as  Chairman,  and  Mr.  F.  B.  Stevens  as  Secre- 
tary. 

The  President  was  authorized  to  appoint  a  Legislative 
Committee  of  three,  of  which  he  and  Mr.  Miller  should  be 
members. 

Messrs.  Miller  and  Fincke  were  appointed  counsel  for 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    553 

the  ensuing  year,  at  a  compensation  of  two  thousand 
($2, OCX))  dollars. 

The  Committee  adopted  a  resolution  to  the  effect  that 
it  was  the  sense  of  the  meeting  that  the  Association  should 
support  an  act  or  general  resolution  for  the  appointment 
of  a  commission  to  revise  the  Banking  Law,  so  far  as  it 
applies  to  Savings  Banks,  and  directed  that  the  resolution 
be  transmitted  to  the  chairmen  of  the  respective  groups, 
with  a  request  for  its  immediate  consideration  by  their 
group. 

The  second  meeting  of  the  Committee  was  held  at  the 
Dry  Dock  Savings  Institution,  in  New  York  City,  on 
January  28,  191 3,  at  which  bills  in  relation  to  the  removal 
of  Savings  Bank  trustees,  and  oaths  of  trustees,  which  had 
been  introduced  in  the  Legislature  at  the  suggestion  of  the 
Superintendent  of  Banks,  were  approved.  Various  amend- 
ments and  alterations  were  suggested  in  bills  in  relation  to 
branch  banks  and  the  merger  of  Savings  Banks,  as  well  as 
to  the  bill  requiring  a  reserve  fund.  It  was  determined 
further  to  refer  these  bills  to  a  special  meeting  of  the  Asso- 
ciation to  be  held  at  Albany. 

During  the  legislative  session  just  past  the  following 
bills  affecting  Savings  Banks  were  enacted  by  the  Legisla- 
ture, approved  by  the  Governor,  and  are  now  laws  of  the 
State : 

Senator  Pollock's  bill,  providing  for  the  removal  from 
office  of  trustees  of  a  Savings  Bank  under  certain  condi- 
tions, is  Chapter  95  of  the  Laws  of  19 13. 

Senator  Pollock's  biU,  requiring  all  trustees  who  have 
not  taken  oath  of  office  to  do  so  before  July  ist,  and  further 
requiring  annual  statements  from  the  trustees  to  the  effect 
that  they  are  still  acting,  is  Chapter  133  of  the  Laws  of 

1913- 

Senator  Pollock's  bill,  making  it  a  felony  for  any  officer, 
trustee,  or  employee  to  abstract  or  wilfully  misapply  any 
of  the  bank's  money  or  property,  or  to  wilfully  misapply 
its  credit,  is  Chapter  102  of  the  Laws  of  1913. 

Senator  Pollock's  bill,  legalizing  for  Savings  Bank  in- 


554  HISTORY  OF  THE  SAVINGS  BANKS 

vestment  State  bonds  issued  to  refund  an  obligation 
which  was  itself  a  legal  investment,  where  there  has  been 
no  default  in  payment  of  principal  or  interest,  has  become 
a  law. 

The  following  bills  passed  both  houses  of  the  Legisla- 
ture and  are  at  present  in  the  hands  of  the  Governor: 

Senator  Pollock's  bill  for  the  revision  of  the  entire  Bank- 
ing Law  by  a  commission  of  five  (5),  to  be  appointed  by 
the  Superintendent  of  Banks.  This  bill  has  now  been 
signed. 

Senator  Pollock's  bill  permitting  the  Superintendent  of 
Banks  to  direct  a  change  in  bookkeeping  methods  when 
the  methods  in  use  seem  to  him  unsafe  or  fail  to  give  him 
desired  information. 

Most  of  the  foregoing  bills  were  somewhat  modified  at 
the  suggestion  of  the  Association,  and  have  seemed  to  the 
Committee  to  be,  on  the  whole,  harmless. 

The  following  bills  failed  of  passage  either  in  the  House 
or  Senate: 

The  bill  for  the  merger  of  Savings  Banks;  the  bill  per- 
mitting branch  Savings  Banks;  Senator  Pollock's  reserve 
bill;  Senator  Herrick's  reserve  bill;  Mr.  Wilmott's  bill 
forbidding  the  use  of  loose-leaf  systems  or  card  systems  in 
Savings  Banks,  Senator  Griffin's  bill  in  regard  to  the  pay- 
ment of  interest  to  the  executors  or  administrators  of  a 
depositor. 

The  Executive  Committee,  in  addition  to  its  work  in  the 
Legislature,  undertook  to  get  Mutual  Savings  Banks  ex- 
empted from  the  provisions  of  the  Income  Tax  Law,  in 
which  they  had  been  included,  either  by  inadvertence  or 
design. 

The  responses  to  the  telegrams  which  were  sent  to  all  the 
banks  in  the  State  were  so  effective  that  the  law  was  im- 
mediately amended  by  inserting  a  provision  that  it  should 
not  apply  to  "Mutual  Savings  Banks  not  having  a  capital 
stock  represented  by  shares." 

The  total  number  of  bills  directly  affecting  banks  re- 
ceived and  carefully  examined  by  your  Committee  was  one 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    555 

hundred  and  two  (102);   of  these,  only  those  mentioned 
above  appear  to  be  appHcable  to  Savings  Banks. 

H.  P.  Brewster,  Chairman. 

ADDRESS   OF   PRESIDENT  MAYNARD 

The  President  (Mr.  Brewster) :  Gentlemen,  I  have  the 
pleasure  of  presenting  to  you  your  new  President,  Mr. 
Maynard.^ 

Mr.  Maynard,  upon  assuming  the  chair,  said: 

Gentlemen:  To  begin  with,  I  would  like  to  say  that  I 
am  the  President  of  the  whole  Association.  As  your  Nomi- 
nating Committee  knows,  I  was  not  a  candidate  for  the 
office.  They  seemed  to  think  that  what  the  Association 
needed  was  the  services  that  I  could  render;  therefore  I 
am  here  at  your  disposal,  to  give  the  best  in  me  for  the  in- 
terests of  the  Savings  Banks  Association,  and  for  the  inter- 
est of  the  smallest  bank  there  is  in  it.  While  we  are  part  of 
the  same  system,  our  circumstances  and  conditions  differ 
so  that  it  is  exceedingly  difficult  and  almost  impossible  in 
matters  of  legislation  to  enact  something  that  is  going  to 
be  for  the  good  of  the  general  system,  and  stiU  at  the  same 
time  to  avoid  doing  what  may  seem  to  be  some  temporary 
injury  or  inconvenience  to  some  one  bank.  I  defy  the 
wisest  man  that  God  ever  created  to  do  that  thing,  because 
it  is  an  impossible  situation. 

To  tell  the  truth,  gentlemen,  when  I  came  here  this 
morning  I  was  a  Uttle  late,  and  I  did  not  think  that  the 
vote  was  to  be  taken  on  the  presidency  until  after  lunch- 
eon; and  I  advertently  came  in  here,  and  I  heard  a  great 
deal  more  than  I  wanted  to  hear,  but  I  could  not  get  out. 
Two  men  next  to  me  were  talking  about  "Maynard." 
They  did  not  know  that  I  was  Maynard  until  I  had  to  tell 
them  that  I  was;  it  got  to  be  so  hot.     Our  friend  here  that 

^Mr.  Maynard  resigned  the  presidency  of  the  Association  when  he  assumed 
the  presidency  of  the  Brooklyn  Trust  Company,  and  automatically  First 
Vice-President  William  Felsinger,  of  the  New  York  Savings  Bank,  became 
President  of  the  Association,  and  so  continued  during  the  balance  of  the  year. 


556  fflSTORY  OF  THE  SAVINGS  BANKS 

I  see  in  front  of  me  got  up  and  asked  you  what  Maynard 
knew  about  that  Reserve  Bill.  I  did  not  want  to  sit  still 
and  say  nothing;  but  that  did  not  seem  to  be  the  time  for 
me  to  get  up  and  declare  whether  I  was  for  or  against  the 
Reserve  BUI;  ever^'body  knows  that  I  was  for  the  Reserve 
Bill,  but  only  because  I  thought  it  was  for  the  best  in- 
terests of  everybody.  That  is  past  and  gone.  Let  us  see 
what  we  can  do  for  the  interest  of  everybody.  That  is  my 
job  as  President  of  this  Association. 

I  do  not  think  there  is  any  use  in  talking  any  more  about 
that  Reserve  Bill.  We  will  only  hope  that  the  condition 
of  the  market  will  make  further  discussion  of  that  unneces- 
sary. 

TRUST    ACCOUNTS    AGGREGATING    MORE    THAN    $3, COO 

It  was  moved,  seconded,  and  unanimously  carried,  that 
a  Committee  be  appointed  with  power  to  consider  the  deci- 
sion of  the  Banking  Department  in  connection  with  all 
bank  accounts,  the  Committee  to  have  the  power  to  pros- 
ecute a  case  and  secure  a  decision  from  the  Court  of  Ap- 
peals if  necessary. 

The  Committee  appointed  was  constituted  as  follows: 
Charles  A.  Miller,  Eugene  F.  Barnes,  George  C.  Edwards, 
Marcus  T.  Hun,  and  William  H.  Rose. 


Thus  closes  the  twenty-year  period  intended  to  be  cov- 
ered by  the  present  liistory  of  the  Savings  Banks  Associa- 
tion of  the  State  of  New  York. 

It  is  a  record  of  earnest,  unselfish,  disinterested  labor  on 
the  part  of  some  of  the  best  citizens  of  the  State  and  nation 
— men  who  are  looked  up  to  in  their  respective  communities 
as  promoters  of  thrift,  virtue,  economy,  financial  stability, 
and  domestic  happiness,  men  worthy  to  be  trusted  in  every 
relation  of  life.     It  is  also  the  record  of  a  growth  as  per- 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    557 

manent  as  it  is  marvellous,  and  of  achievement  as  substan- 
tial as  it  is  brilliant. 

If  the  next  twenty  years  shall  show  an  equal  growth 
and  prosperity,  the  people  of  the  State  of  New  York  will 
be  indeed  fortunate. 


INTERESTING  AND  VALUABLE  INFORMATION 

PERTAINING   TO   THE   BANKING 

SYSTEM  OF  NEW  YORK 

The  following  excerpts  from  the  annual  report  of  the 
Superintendent  of  Banks  of  New  York,  George  C.  Van 
Tuyl,  Jr.,  for  the  year  19 13,  transmitted  to  the  Legislature 
March  13,  19 14,  cannot  fail  to  prove  of  interest  to  aU  con- 
nected with  banking: 

NEW  York's  commanding  position 

The  banking  power  of  the  United  States,  including  cap- 
ital, surplus,  undivided  profits,  deposits,  exclusive  of  bank 
deposits  and  national  bank  notes  issued  as  circulation,  as 
computed  by  the  Comptroller  of  Currency,  aggregate 
$23,181,000,000. 

The  banking  power  of  the  New  York  State  banks  and 
trust  companies  aggregates  $2, 03  5, 000,000,  and  the  Savings 
Banks  of  the  State  contribute  an  additional$i, 926,000,000, 
making  New  York  State's  percentage  seventeen  per  cent, 
of  the  total  for  all  banks  in  the  United  States. 

The  total  banking  capital,  including  surplus  and  undi- 
vided profits  of  aU  banking  institutions  in  this  country, 
approximates  $4,448,000,000.  This  figure  includes  the 
aggregate  capital,  surplus,  and  undivided  profits  of  Savings 
Banks  in  many  States  where  such  banks  are  operated  as 
stock  corporations. 

The  resources  of  all  banks  in  the  United  States  aggregate 
$26,300,000,000,  and  the  resources  of  the  New  York  State 

5S8 


HISTORY  OF  THE  SAVINGS  BANKS  ASSOCIATION    559 

banks  and  trust  companies  $2,230,000,000,  or  about  eight 
and  a  half  per  cent,  of  the  whole,  but  again,  by  adding  the 
figures  of  the  Savings  Banks  ($1,926,000,000),  the  total  is 
largely  increased  to  $4,156,000,000,  or  fifteen  and  eight 
tenths  per  cent.,  the  percentage  for  New  York  State. 

Savings  deposits  in  all  the  banks  of  the  United  States 
are  estimated  at  $6,972,000,000.  The  aggregate  deposits 
in  New  York  State  Savings  Banks  are  $1,741,000,000,  so  it 
appears  that  the  Savings  Banks  of  this  State  have  about 
twenty-five  per  cent,  of  the  entire  savings  deposits  of  the 
country.  The  estimated  savings  deposits  in  Savings 
Banks  in  the  United  States,  including  Mutual  Savings 
Banks,  and  those  operated  as  stock  corporations,  aggre- 
gate $4,743,000,000,  and  on  this  basis  of  comparison  the 
aggregate  deposits  in  the  Savings  Banks  of  this  State  are 
thirty-six  and  three  fourths  per  cent,  of  the  total  for  the 
country. 

The  aggregate  resources  of  the  Savings  Banks  of  the 
State  of  New  York  on  January  i,  1914,  according  to  figures 
contained  in  the  annual  report  of  the  Superintendent  of 
Banks,  were  $1,926,334,331. 

The  amount  due  depositors  at  the  close  of  the  year  19 13 
was  $1,741,697,466. 

The  number  of  open  accounts  on  the  same  date  was 

3,1435444. 

The  dividends  paid  to  depositors  for  the  year  aggregated 
$60,611,029. 

The  expense  per  one  thousand  dollars  of  assets  held  in 
all  the  Savings  Banks  of  the  State  was  $3.21. 

The  average  amount  of  each  account  was  $554.07. 

There  are  one  hundred  and  forty  Savings  Banks  in  the 
State  at  the  close  of  the  year  19 13,  which  number  has  re- 
mained unchanged  for  several  years  past. 


56o  HISTORY  OF  THE  SAVINGS  BANKS 

These  facts  and  figures  show  at  a  glance  the  comm&^nd- 
ing  position  of  the  State  of  New  York  in  the  banking  power 
of  the  United  States. 

BANKING  LAW  REVISTON 

This  record  of  twenty  years  of  labor  and  achievement 
would  not  be  complete  without  a  reference  to  the  revision 
of  the  Banking  Laws  of  the  State  of  New  York,  the  most 
important  event  in  the  administration  of  Superintendent 
Geo.  C.  Van  Tuyl,  Jr.,  the  immediate  predecessor  of  Super- 
intendent Eugene  Lamb  Richards. 

.The  Commission  appointed  by  the  Superintendent  of 
Banks  to  revise  the  Banking  Law,  pursuant  to  the  provi- 
sions of  Chapter  705  of  the  Laws  of  19 13,  as  amended  by 
Chapter  3,  Laws  of  19 14,  made  its  report  to  the  Legisla- 
ture on  February  26,  19 14.  This  report  was  in  the  form 
of  a  bill  containing  new  Chapter  2  of  the  Consolidated 
Laws,  embodying  a  Banking  Law  adapted  to  present  busi- 
ness conditions,  expressed  in  clear,  concise  language,  and 
very  carefully  drawn,  which  the  Legislature  at  once  passed 
and  the  Governor  signed. 

The  Commission  appointed  by  Superintendent  George 
C.  Van  Tuyl,  Jr.,  was  constituted  as  follows: 

A.  Barton  Hepburn,  President  Chase  National  Bank, 
New  York,  Chairman;  Frank  M.  Patterson,  Attorney, 
New  York,  Vice-chairman;  Charles  L.  Bernheim,  mer- 
chant, New  York  City;  Louis  Goldstein,  Assistant  District 
Attorney,  Kings  County,  Brooklyn;  John  H.  Gregory,  Vice- 
President  Central  Bank,  Rochester;  Frank  E.  Howe,  Presi- 
dent Manufacturers'  National  Bank,  Troy;  Joseph  French 
Johnson,  a  member  of  the  faculty  of  New  York  University; 
Herbert  H.  Lehman,  private  banker.  New  York  City; 


ASSOCIATION  OF  THE  STATE  OF  NEW  YORK    561 

Randall  J.  LeBoeuf,  former  Judge  of  the  Supreme  Court, 
Albany;  Elliott  C.  McDougall,  President  Bank  of  Buffalo; 
Edwin  P.  Maynard,  President  Brooklyn  Trust  Company; 
Jeremiah  T.  Mahoney,  Judge,  New  York  City;  Charles  A. 
Miller,  President  Savings  Bank  of  Utica;  John  J.  Pulleyn, 
Comptroller  Emigrant  Industrial  Savings  Bank,  New 
York  City;  John  Harsen  Rhoades,  Trustee  Greenwich  Sav- 
ings Bank,  New  York  City ;  Leopold  Stern,  merchant.  New 
York  City. 

The  secretary  of  the  Commission  was  Edwin  F.  Rore- 
beck,  and  the  counsel  were  John  DeWitt  Warner  and 
George  W.  Morgan,  both  of  New  York  City,  and  George 
I.  Skinner,  the  latter  gentleman,  since  March  i,  1897, 
First  Deputy  Superintendent  of  Banks,  being  able  to  serve 
the  Commission  through  a  leave  of  absence  granted  him 
for  that  purpose  by  the  Superintendent  of  Banks.  It  is  no 
exaggeration  to  say  that  Mr.  Skinner's  assistance  was  in- 
valuable to  the  Cormnission.  Upon  the  completion  of  his 
labors  he  returned  to  his  original  duties  as  Deputy  Super- 
intendent of  Banks. 

Vice-chairman  Patterson  served  the  Commission  with 
great  acceptability,  devoting  all  his  abundant  energies  to 
the  difficult  and  delicate  task  that  confronted  the  board. 

The  members  of  the  Commission  were  representative  of 
the  various  classes  of  bankers  and  banking  institutions  in 
this  State,  of  business  and  commercial  interests,  and  in- 
cluded attorneys  with  special  banking  experience  and 
technical  knowledge  of  Banking  Law.  The  Commission 
was  divided  into  various  Committees  with  special  duties, 
and  repeated  hearings  were  given  to  the  various  interests 
affected  by  the  proposed  changes  in  the  statute ;  in  addi- 
tion to  this,  in  order  to  give  the  widest  possible  publicity 
to  the  proposed   changes   and   reforms,   and   to   invite 


562  HISTORY  OF  THE  SAVINGS  BANKS 

helpful  criticisms,  redrafts  of  the  different  articles  of  the 
Banking  Law  were  from  time  to  time  submitted  to  the  rep- 
resentatives of  these  interests.  As  to  arrangement,  the 
Commission  sought  to  make  each  of  the  articles  of  the 
Banking  Law  complete  in  itself  and  to  define  terms  when- 
ever definition  was  deemed  necessary  to  a  complete  and 
accurate  understanding  of  the  language  used. 

The  work  of  the  Commission  was  somewhat  retarded 
by  the  repeated  postponements  in  Congress  of  action  upon 
the  present  Federal  Reserve  Act,  in  view  of  the  necessity 
of  conforming  the  provisions  of  the  State  law  to  it,  in  order 
to  create  a  harmonious  and  sound  financial  system. 

As  to  the  completed  work  of  the  Commission,  it  seems  to 
be  the  consensus  of  opinion  among  banking  men  and  ex- 
perts that  the  new  Consolidated  Law  is  a  model  of  its  kind, 
one  under  which  the  State's  financial  interests  will  be  con- 
served and  safeguarded,  and  at  the  same  time  room  be  left 
for  all  legitimate  expansion. 


APPENDIX 


LIST  OF 
SAVINGS  BANKS  IN  THE  STATE  OF  NEW  YORK 

ARRANGED  IN  THE  ORDER  OF  THEIR  INCORPORATION 

Together  with  the  Original  Incorporators  of  Each  Bank  Specially 
Chartered  up  to  the  Passage  of  the  General  Act  of  i8/j. 

HEREWITH  is  given  a  list  of  the  Savings  Banks  in  the  State 
of  New  York  on  the  first  day  of  January,  1914,  arranged  in 
the  order  of  their  incorporation,  together  with  a  Hst  of  the 
original  incorporators  of  each,  up  to  the  passage  of  the  General 
Incorporation  Act,  iniSys,  after  which  time  the  Legislature  was  for- 
bidden by  the  revised  Constitution  to  pass  special  acts  of  incorpora- 
tion. It  has  been  thought  that  such  a  list  will  be  found  valuable  for 
purposes  of  reference.  The  data  have  been  obtained  at  first  hand 
from  the  Session  Laws  of  the  State  of  New  York  containing  the 
original  acts  of  incorporation.  No  one  can  look  over  this  list,  even 
casually,  without  being  struck  by  the  high  character  of  the  men 
whose  names  appear  among  the  hsts.  Almost  at  random  one  comes 
across  such  as  William  Bayard,  Brockholst  Livingston,  Chauncey 
M.  Depew,  Hamilton  Fish,  Isaac  Newton,  and  John  C.  Beekman, 
in  New  York;  Millard  Fillmore  and  Dean  Richmond,  in  Buffalo; 
Samuel  Blatchford,  in  Auburn;  Matthew  Vassar,  in  Poughkeepsie; 
Washington  Irving,  in  Tarry  town;  Ezra  Cornell,  Ithaca;  Joseph 
C.  Yates,  in  Schenectady;  Esaias  Warren,  in  Troy;  Harmon  Pum- 
pelly  and  Abraham  Lansing,  in  Cohoes;  Harmanus  Bleecker, 
Charles  R.  Webster,  Jesse  Buel,  Volckert  P.  Douw,  Erastus  Corn- 
ing, John  V.  L.  Pruyn,  William  L.  Marcy,  Thomas  W.  Olcott,  and 
Ira  Harris,  in  Albany. 

For  fully  half  a  century,  a  large  part  of  the  time  and  attention  of 
the  Legislature  was  occupied  with  the  consideration  of  these  special 

565 


566  APPENDIX 

charters  and  the  subsequent  amendment  of  the  same,  not  only  for 
banks  of  discount  and  savings,  but  in  all  fields  of  business  enterprise. 

An  act  of  the  Legislature,  as  far  back  as  1782,  prohibited  any  other 
bank  within  the  limits  of  the  State  than  the  Bank  of  North  America. 
But  the  Legislature  subsequently  chartered  State  banks  from  time 
to  time.  In  1829  the  Safety  Fund  was  created  and  the  appoint- 
ment of  three  bank  commissioners  provided  for.  The  commis- 
sioners visited  the  banks  of  the  State,  examined  into  their  condition, 
and  reported  the  results  of  their  investigations  to  the  Legislature 
each  year.  The  appointment  of  a  fourth  commissioner  was  author- 
ized in  1840,  and  the  banks  of  discount  organized  under  the  general 
law  were  placed  imder  the  supervision  of  the  banking  commissioners. 

The  office  was  aboUshed  in  1843  ^-nd  the  banks  required  to  report 
to  the  Comptroller. 

The  number  of  trustees  designated  in  the  acts  of  incorporation 
was  not  uniform,  varying  from  nine  to  as  many  as  forty-three. 
Neither  was  there  any  uniformity  concerning  reports  of  operations. 
Many  of  the  charters  required  annual  reports  to  the  Legislature, 
while  others  required  none  at  all.  Some  also  required  annual 
reports  to  be  made  to  the  Common  Council  of  the  city  in  which 
the  bank  was  located.  By  the  General  Act  of  1857,  Savings  Banks 
were  required  to  report  semi-annually,  on  the  first  days  of  January 
and  July,  to  the  Superintendent  of  Banks.  Usually  the  charters  of 
the  respective  banks  provided  that  the  books  should  be  open  to  the 
inspection  of  the  Comptroller  of  the  State,  or  such  other  persons  as 
he  or  the  Legislature  might  designate,  but  as  no  duty  was  imposed 
upon  anybody,  nothing  appears  to  have  been  done. 

There  was  no  Savings  Bank  Law  in  the  State  of  New  York,  aside 
from  the  charters  of  the  several  banks  incorporated,  until  the  year 
1851,  when  an  Act  was  passed  to  organize  a  Bank  Department 
(Chapter  164,  Laws  of  1851).  Under  the  provisions  of  this  Act  a 
Superintendent  was  appointed  for  the  period  of  three  years,  who 
was  to  receive  a  salary  of  $2,500  a  year.  It  was  provided  in  the  law 
that  all  the  expenses  of  administration  were  to  be  paid  by  the  incor- 
porated banks.  The  Constitution  of  1846  had  forbidden  the  special 
chartering  of  Banks  of  Discount,  though  not  of  Savings  Banks,  and 
for  many  years  thereafter  the  latter  continued  to  be  specially  incor- 
porated. 


APPENDIX  567 

These  charters  were  usually  granted  in  perpetuity,  subject,  of 
course,  to  repeal  or  modification.  In  many  cases  special  privileges 
— some  of  them  of  doubtful  propriety — had  been  granted,  which 
they  desired  to  retain,  while  others,  quite  as  naturally,  wished  to 
obtain  for  themselves  the  same  or  still  greater  powers  and  immuni- 
ties. Thus,  much  jealousy  was  engendered  among  the  banks,  and 
the  hectored  legislators  naturally  became  cautious,  not  to  say  sus- 
picious, as  to  all  of  them.  In  a  general  way  the  powers  of  the  banks 
were  regulated,  but  within  certain  limitations  the  trustees  were  per- 
mitted great  freedom  of  action  and  management. 

In  the  year  1869,  by  reason  of  the  steady  increase  in  the  number 
of  applications  for  special  charters,  a  law  was  passed  (Chapter  213, 
Laws  of  1869)  to  regulate  and  restrict  the  organization  of  institu- 
tions for  savings.  This  Act  required  all  persons  desirous  of  organ- 
izing such  banks  to  set  forth  a  statement  for  the  information  of  the 
Superintendent  of  Banks  and  to  obtain  his  approval  of  the  proposed 
charter  before  submitting  it  to  the  Legislature  for  passage. 

In  the  year  1874  an  amendment  of  the  Constitution  of  New  York 
was  adopted  by  vote  of  the  people,  directing  the  Legislature  to  enact 
a  general  law  for  the  incorporation  of  Savings  Banks,  and  forbidding 
the  passage  of  special  acts.  Thus  the  year  1875  is  notable  for  the 
passage  of  a  law  which  not  only  relieved  the  Legislature  from  an  em- 
barrassing position,  but  standardized  the  Savings  Banks  of  the 
State.  The  General  Act  repealed  all  provisions  of  special  Acts  that 
were  inconsistent  with  the  General  Act,  thus  adding  vastly  to  the 
financial  stability  of  the  banks,  as  well  as  to  the  facility  of  supervi- 
sion and  inspection. 

The  Act  of  1875,  undoubtedly  one  of  the  wisest  and  most  compre- 
hensive bank  laws  to  be  found  on  the  statute  books  of  any  State, 
properly  may  be  regarded  as  the  foundation  of  all  subsequent  legis- 
lation on  the  subject,  a  fact  sufficiently  attested  by  the  frequent  use 
of  it  as  a  model  in  numerous  other  States. 

1819 
BANK  FOR  SAVINGS  IN  THE  CITY  OF  NEW  YORK 

Chartered  March  26,  i8ig  (Chap.  62,  L.  1819).  (Act  petitioned  for  by  the 
Society  for  the  Prevention  of  Pauperism,  in  the  City  of  New  York.)  Original  in- 
corporators named  in  the  Act:  Geo.  Arcularius,  Wm.  Bayard,  Noah  Brown, 
Thomas  Buckley,  Cadwalader  D.  Colden,  Duncan  P.  Campbell,  Francis  Cooper, 
James  Eastbum,  Henry  Eckford,  Thomas  Eddy,  WilUam  Few,  Philip  Hone.John 


568  APPENDIX 

E.  Hyde,  Peter  A.  Jay,  Brockholst  Livingston,  Zachariah  Lewis.  John  Murray, 
Jr.,  Dennis  McCarthy,  Andrew  Morris,  James  Palmer.  John  Pintard,  Abraham 
Russell,  Jacob  Sherred,  Joseph  Smith,  Najah  Taylor,  Jeremiah  Thompson,  Wil- 
liam Wilson,  Samuel  Wood.  William  Bayard  was  the  first  President;  died  in 
oflBce  in  1826. 

1820 
ALBANY  SAVINGS  BANK 

Chartered  March  24, 1820  (Chap.  100,  L.  1820) ,  on  the  petition  of  Wm.  James, 
Charles  R.  Webster,  Jesse  Buel,  John  Townsend,  and  Joseph  Alexander.  Origi- 
nal incorporators:  Stephen  Van  Rensselaer,  Wm.  James,  Joseph  Alexander, 
John  Townsend,  Charles  R.  Webster,  Jesse  Buel,  Thomas  Russell,  Volkert  P. 
Douw,  John  W.  Yates,  Wm.  Durant,  Douw  Fonda,  Simeon  De  Witt,  Peter  Boyd, 
John  Spencer,  John  L.  Winne,  Wm.  McHarg,  Matthew  Gill,  Harmanus  Bleecker, 
and  Silvanus  P.  Jermain. 

1823 
TROY  SAVINGS  BANK 

Chartered  April  23,  1823  (Chap.  232,  L.  1823),  on  the  petition  of  Esaias  War- 
ren, Richard  P.  Hart,  Nathan  Warren,  William  Smith,  James  Van  Schoonhoven, 
and  Joseph  Russell.  Original  incorporators:  Esaias  W^arren,  Richard  P.  Hart, 
Nathan  Warren,  Wm.  Smith,  James  Van  Schoonhoven,  Joseph  Russell,  Derick 
Lane,  Gurdon  Corning,  David  Buel,  Jr.,  Piatt  Titus,  and  Thaddeus  Mead. 

1827 
BROOKLYN  SAVINGS  BANK 

Chartered  April  7,  1827  (Chap.  77,  L.  1827).  Original  incorporators;  David 
Anderson,  Robert  Bache,  James  B.  Clark,  Andrew  Demarest,  Charles  I. 
Doughty,  Thomas  Everitt,  Jr.,  James  Engle,  Augustus  Graham,  Andrew Mercein, 
Hezekiah  B.  Pierpoint,  Peter  W.  Radcliff,  Eleakim  Raymond,  Robert  Snow, 
Joshua  Sands,  Clarence  D.  Sackett,  Jeffry  Smith,  Alden  Spooner,  Fanning  C. 
Tucker,  Adam  Tredwell,  Peter  Turner,  Abraham  Vanderveer,  Losee  Van  Nos- 
trand,  Adrian  Van  Sinderin,  Henry  Waring,  and  Richard  Wells. 

1829 
SEAMEN'S  BANK  FOR  SAVINGS,  NEW  YORK 

Chartered  January  31,  1829  (Chap.  17,  L.  1829).  Original  incorporators: 
Najah  Taylor,  Rufus  Davenport,  Silas  Holmes,  Lockwood  De  Forest,  Peletiah 
Perit,  Peter  Remsen,  Reuben  Brumley,  Gurdon  Buck,  Benjamin  Clark,  Hubert 
Van  Wagenen,  Brittain  L.  Woolley,  Geo.  T.  Trimble,  Gould  Hoyt,  Benjamin  L. 
Swan,  Anson  G.  Phelps,  John  R.  Hurd,  Benjamin  Strong,  George  Douglass, 
James  Lovitt,  Jeromus  Johnson,  Oliver  H.  Hicks,  John  Pintard,  and  Horace 
Holden. 

183 1 
POUGHKEEPSIE  SAVINGS  BANK 

Chartered  April  16,  1831  (Chap.  134,  L.  1831).  Original  incorporators:  Wm. 
Davies,  James  Emott,  James  Hooker,  Frederick  Barnard,  Matthew  Vassar, 
Teunis  Van  Kieeck,  Thomas  W.  Tallmadge,  Nehemiah  Conklin,  Griffin  William- 
son, Henry  A.  Livingston,  and  Stephen  Armstrong. 


APPENDIX  569 

1831 
ROCHESTER  SAVINGS  BANK 

Chartered  April  21,  1831  (Chap.  207,  L.  1831).  Original  incorporators:  Levy 
Ward,  Jr.,  Jacob  Graves,  Everard  Peck,  Wm.  S.  Whittlesey,  David  Scoville, 
Edward  R.  Everest,  Willis  Kempshall,  Jonathan  Child,  Ezra  M.  Parsons,  Ash- 
bell  W.  Riley,  Albemarle  H.  Washburn,  Joseph  Medbury,  Lyman  B.  Lang- 
worthy,  Elihu  F.  Marshall,  and  Harvey  Frink. 

[Rochester,  at  this  time,  was  a  village  of  about  11,000  inhabitants.  There 
were  no  railroads,  but  the  Erie  Canal,  then  regarded  as  a  magnificent  commercial 
enterprise,  had  been  completed  six  years  previously.  Canal  packets  and  stages 
performed  the  work  now  done  by  the  railroads.  Rochester  was  the  wheat  market 
for  the  entire  Genesee  Valley.  Nearly  300,000  barrels  of  flour  were  milled  in  the 
year  1 83 1 .     One  daily  paper,  the  A  dvertiser,  was  published.] 

1833 
GREENWICH  SAVINGS  BANK,  NEW  YORK 

Chartered  April  24, 1833  (Chap.  215,  L.  1833).  Original  incorporators:  James 
N.  Wells,  Geo.  Suckley,  Charles  Oakley,  Stuart  F.  Randolf,  John  R.  Satterlees, 
Wm.  L.  Morris,  James  B.  Murray,  Samuel  Whittemore,  Michael  Van  Beuren, 
John  De  Lamater,  Robert  Halliday,  John  Groshon,  Washington  W.  Rodman, 
Timothy  Whittemore,  Floyd  Smith,  Joseph  Tucker,  Thomas  Gumming,  D.  A. 
Cushman,  Joseph  W.  Beadel,  John  Milderberger,  Nathaniel  Jarvis,  John  Bolton, 
David  Vandervoort,  John  Rogers,  George  Riblet,  Gideon  Lee,  Abraham  Van 
Nest,  George  P,  Rogers,  Wm.  C.  Rhinelander,  and  Thomas  I.  Stevens. 

1834 
SCHENECTADY  SAVINGS  BANK 

Chartered  April  29, 1834  (Chap.  205,  L.  1834).  Original  incorporators:  Joseph 
C.  Yates,  Archibald  Craig,  Harmanus  Peek,  Thomas  Palmer,  Ephraim  Benedict, 
Wm.  Cimingham,  Alonzo  C.  Page,  Harvey  Davis,  Wm.  A.  S.  North,  Archibald 
Campbell,  George  McQueen,  John  Pangburn,  and  Cornelius  C.  Van  Vranken. 

1834 
BOWERY  SAVINGS  BANK,  NEW  YORK 

Chartered  May  i,  1834  (Chap.  229,  L.  1834).  Original  incorporators:  Benja- 
min M.  Brown,  Anson  G.  Phelps,  David  Cotheal,  E.  H.  Warner,  Wm.  Hibbard, 
Peter  G.  Stuyvesant,  Jacob  Aims,  Thomas  Jeremiah,  James  Mills,  Andrew  C. 
Wheeler,  Francis  Fickett,  Reuben  Munson,  Hamilton  Fish,  Wm.  E.  Craft,  John 
Wood,  Frederick  R.  Lee,  Chas.  Dusenberry,  Gideon  Ostrander,  Peter  Coutant, 
Caleb  Bartlett,  Joseph  R.  Taylor,  Isaac  L.  Varian,  Jacob  P.  Bunting,  Wm.  C. 
Wales,  Robert  M.  Hartley,  Wm.  Lee,  Henry  C.  Sperry,  Nicholas  Schureman, 
Lambert  Suydam,  Geo.  C.  Thomas,  E.  D.  Comstock,  Samuel  J.  Willis,  Peter 
Gassner,  Peter  Pinckney,  Jobez  Lovett,  Samuel  Andreas,  Wm.  J.  McNeven 
John  O'Neal,  Smith  Ovutt,  and  Luke  Usher. 

[The  building  was  to  be  located  in  the  Bowery,  north  of  Grand  Street.] 

1839 
SAVINGS  BANK  OF  UTICA 

Chartered  April  26,  1839  (Chap.  242,  L.  1839).  Original  incorporators: 
Thomas  Walker,  John  C.  Devereux,  Samuel  Stocking,  Joseph  Kirkland,  S.  D. 
Childs,  Stalham  Williams,  John  Savage,  Thomas  H.  Hubbard,  John  H.  Ostrom, 


570  APPENDIX 

Hiram  Denio,  Charles  P.  Kirkland,  James  McGregor,  J.  M.  Church,  William 
Francis,  and  N.  Devereux. 

1846 

BUFFALO  SAVINGS  BANK 

Chartered  May  9, 1846  (Chap.  176,  L.  1846).  Original  incorporators:  Albert 
H.  Tracy,  Millard  Fillmore,  John  L.  Kimberly,  Noah  H.  Gardner,  Francis  J.  Han- 
del, Frederick  Dellenbaugh,  Jacob  Seibold,  Elijah  D.  Efnor,  Russell  H.  Hey  wood, 
Warren  Bryant,  Daniel  Bowen,  Isaac  Sherman,  WiUiam  Tweedy,  Hiram  P. 
Thayer,  Benjamin  Caryl,  Charles  Townsend,  Francis  C.  Brunk,  and  Ernst  G.  Grey. 

[The  amount  of  the  deposits  was  limited  in  the  charter  to  $750,000.] 


EAST  RIVER  SAVINGS  INSTITUTION,  NEW  YORK 

Chartered  April  11,  1848  (Chap.  256,  L.  1848).  Original  incorporators:  John 
C.  Beekman,  Curtis  Peck,  Dow  D.  Williamson,  Alexander  C.  Poillon,  Moses 
Smith,  John  Harper,  Daniel  H.  Brooks,  James  R.  Wood,  Richard  L.  Schief- 
felin,  Benjamin  Drake,  Robert  L.  Case,  John  Leveridge,  Geo.  M.  Clearman, 
Eiias  G.  Drake,  Henry  P.  Havens,  Thomas  Williams,  Jr.,  Daniel  Holt,  Edward 
J.  Midgely,  James  A.  WiUiamson,  James  Appleby,  John  W.  Avery,  Henry 
Dougherty,  Geo.  B.  Whitfield,  Robert  Bilsborrow,  James  V.  Rich,  Lawrence  M. 
Luther,  Gardner  Sherman,  and  James  R.  Rapelye. 

1848 
UNION  SQUARE  SAVINGS  BANK,  NEW  YORK 

Incorporated  as  "The  Institution  for  the  Savings  of  Merchants'  Clerks," 
April  12, 1848  (Chap.  324,  L.  1848),  under  the  auspices  of  the  New  York  Chamber 
of  Commerce  and  the  Mercantile  Librarj'.  Original  incorporators:  Moses  H. 
Grinnell,  James  G.  King,  James  DePeyster  Ogden,  Prosper  M.  Wetmore,  Mat- 
thew Maury,  Townsend  Harris,  Thomas  W.  Groser,  Isaac  H.  Bailey,  W.  A.  Kis- 
sam,  John  J.  Palmer,  and  Wm.  H.  Macy. 

[Began  business  in  Beekman  Street.] 

1848 
DRY  DOCK  SAVINGS  INSTITUTION,  NEW  YORK 

Chartered  April  12,  1848  (Chap.  368,  L.  1848).  Original  incorporators:  Daniel 
W.  Townsend,  Barney  Hannegan,  Geo.  S.  Mann,  Charles  Curtis,  Jabez  Williams, 
Jacob  Miller,  John  Briested,  Theodosius  Secor,  Amos  F.  Hatfield,  Robert  M. 
Stratton,  Thomas  B.  Stillman,  Robert  J.  Whittemore,  John  Dimon,  Isaac  New- 
ton, and  Isaac  Shaurman. 

1849 

AUBURN  SAVINGS  BANK 

Chartered  March  12, 1849  (Chap.  92,  L.  1849).  Original  incorporators:  Cyrus 
C.  Dennis,  Samuel  Blatchford,  Nelson  Beardsley,  Sylvester  Willard,  Charles  B. 
Perry,  Spencer  Parsons,  John  L.  Watrous,  Thomas  Y.  How,  Jr.,  William  Beach, 
Daniel  Hewson,  Josiah  N.  Starin,  James  C.  Derby,  and  John  Olmsted. 

1849 
SYRACUSE  SAVINGS  BANK 

Chartered  March  30,  1849  (Chap.  179,  L.  1849).  Original  incorporators: 
Harvey  Baldwin,  Moses  D.  Burnett,  James  L>Tich,  George  Gaul,  John  D.  Bur- 


APPENDIX 


571 


nett,  Johnson  Hall,  Harvey  Rhoades,  Philander  W.  Forbes,  John  B.  Wickes,  Wm. 
W.  Teall,  Thomas  B.  Fitch,  Thomas  T.  Davis,  James  G.  Tracy,  Elias  W.  Leaven- 
worth, George  F.  Comstock,  Harvey  Gifford,  Thomas  Bennett,  and  William 
Clarke 

1850 
ALBANY  CITY  SAVINGS  INSTITUTION 

Chartered  March  29, 1850  (Chap.  119,  L.  1850).  Original  incorporators:  John 
Taylor,  Lansing  Pru3ai,  James  Kidd,  Erastus  Coming,  James  McNaughton, 
John  V.  L.  Pruyn,  Wm.  Humphrey,  Watts  Sherman,  John  T.  Norton,  James 
Gould,  Samuel  Pruyn,  Henry  H.  Martin,  James  Maher,  John  Knower,  John 
McKnight,  Wm.  Boardman,  John  G.  White,  EUis  Baker,  Christopher  W.  Bender, 
and  Thomas  Noonan. 

1850 
HUDSON  CITY  SAVINGS  INSTITUTION 

Chartered  April  4,  1850  (Chap.  145,  L.  1850).  Original  incorporators:  Olivet 
Bronson,  Robert  A.  Barnard,  Geo.  E.  Seymour,  Mathew  Mitchell,  Josiah  W. 
Fairfield,  Peter  Van  Duesen,  Charles  Paul,  Alexander  C.  Mitchell,  Peter  Hoff- 
man, John  Bennett,  James  Clark,  Theodore  Miller,  and  George  H.  Power. 

1850 
MONROE  COUNTY  SAVINGS  BANK,  ROCHESTER 

Chartered  April  8,  1850  (Chap.  228,  L.  1850).  Original  incorporators:  Levi 
A.  Ward,  Everard  Peck,  Freeman  Clarke,  Nehemiah  Osbom,  Ephraim  Moore, 
David  R.  Barton,  Geo.  W.  Parsons,  Wm.  W.  Ely,  Wm.  N.  Sage,  Alvah  Strongj 
Martin  Briggs,  Thomas  Hanvey,  Lewis  Selye,  Moses  Chapin,  Ebenezer  Ely, 
Daniel  E.  Lewis,  Anson  Bronson,  Joel  P.  Milliner,  Chas.  W.  Dundas,  John  El- 
wanger,  and  Theodore  B.  Hamilton. 

1850 
MANHATTAN  SAVINGS  INSTITUTION,  NEW  YORK 

Chartered  April  10,  1850  (Chap.  284.  L.  1850).  Original  incorporators:  the 
Mayor  and  Comptroller  of  the  City  of  New  York,  Caleb  S.  Woodhull,  Edwin  J. 
Brown,  Silas  C.  Herring,  Eleazer  Parmly,  Nathaniel  G.  Bradford,  Wm.  A.  Mead, 
James  Van  Norden,  Wm.  J.  Valentine,  Jacob  B.  Herrick,  John  S.  Harris,  Jonas 
F.  Concklin,  Lewis  Beach,  Edmund  K.  Bussing,  John  S.  Williams,  Alonzo  A. 
Alvord,  Ambrose  C.  Kingsland,  Enoch  Dean,  Jay  Jarvis,  Geo.  Hastings,  Jacob 
Miller,  Denton  Pearsall,  James  Harper,  Daniel  Burnett,  D.  Austin  Muir,  Daniel 
Kingsland,  James  C.  Baldwin,  John  P.  Ware,  Thomas  W.  Dick,  Lewis  B.  Loder, 
Luther  C.  Carter,  Henry  Stokes,  Gilbert  Cleland,  and  Charles  Pitt. 

1850 
EMIGRANT  INDUSTRIAL  SAVINGS  BANK,  NEW  YORK 

Chartered  April  10,  1850  (Chap.  290,  L.  1850).  Original  incorporators:  Greg- 
ory Dillon,  Robert  B.  Mintum,  Joseph  Stuart,  Wm.  Watson,  Terence  Donelly, 
John  Nicholson,  Felix  Ingoldsby,  Andrew  Carrigan,  Peter  A.  Hargous,  James 
Kerrigan,  John  Milhan,  John  Manning,  James  Mathews,  Hugh  Kelly,  John 
McMenomy,  Wm.  Redwood,  John  P.  Nesmith,  and  Fanning  C.  Tucker. 


572  APPENDIX 

1850 
SOUTH  BROOKLYN  SAVINGS  INSTITUTION,  BROOKLYN 

Chartered  April  10, 1850  (Chap.  299,  L.  1850).  Original  incorporators:  David 
B.  Baylis,  Ira  Smith,  Gassner  B.  Lamar,  Nicholas  E.  Luquere,  Edward  Dun- 
ham, Isaac  A.  Storms,  Wm.  Spencer,  John  D.  Cocks,  James  W.  Pinkney,  Geo.  A. 
Jervis,  Edmund  Fish,  Peter  R.  Anderson,  John  C.  Riker,  Francis  B.  Stryker, 
Tunis  G.  Bergen,  Geo.  Fletcher,  Richard  Whipple,  Edward  A.  Lambert,  John  N. 
Taylor,  Arthur  W.  Benson,  James  S.  T.  Stranahan,  Rollin  Sanford,  Wm.  Powers, 
John  Skillman,  John  C.  Smith,  and  Anthony  F.  Ostrom. 

1851 
WILLIAMSBURGH  SAVINGS  BANK,  BROOKLYN 

Chartered  April  9,  1851  (Chap.  109,  L.  1851).  Original  incorporators:  Tim- 
othy Coffin,  Geo.  Ricard,  Wm.  Wall,  Edmund  Driggs,  John  B.  Wells,  Jonathan 
S.  Burr,  Henry  P.  Freemen,  Nathaniel  Briggs,  John  S.  Trctt,  Jr.,  Richard  Lake, 
Henry  Oltmans,  Gerhardus  L:  Demarest,  Richard  Ten  Eyck,  Chas.  W.  Hough- 
ton, Isaac  Henderson,  Samuel  M.  Meeker,  Downing  W.  Graves,  and  Wm.  M. 
McCutchen. 

1851 

COHOES  SAVINGS  INSTITUTION 

Chartered  April  11,  1851  (Chap.  138,  L.  1851).  Original  incorporators:  Chas. 
A.  Olmsted,  Truman  G.  Younglove,  Egbert  Egberts,  Hugh  White,  Daniel  Sim- 
mons, Isaac  D.  F.  Lansing,  Henry  D.  Fuller,  Wm.  F.  Carter,  Abraham  Lansing, 
Joshua  Bailey,  Wm.  N.  Chadwick,  Edward  E.  Kendrick,  Teunis  Van  Vechten, 
Andrew  D.  Lansing,  Harmon  Pumpelly,  Wm.  Burton,  Joshua  R.  Clark,  Jere- 
miah Clute,  and  Miles  White. 

1851 

ULSTER  COUNTY  SAVINGS  BANK,  KINGSTON 

Chartered  April  12,  1851  (Chap.  152,  L.  1851).  Original  incorporators:  Cor- 
nelius Bruyn,  Jonathan  H.  Hasbrouck,  Wm.  Reynolds,  Maurice  Wurts,  Thomas 
Cornell,  Henry  H.  Reynolds,  Alvan  B.  Preston,  Geo.  A.  Dudley,  Gilbert  Dubois, 
Aaron  B.  Dewitt,  Wm.  Burtt,  Edmund  Ettinge,  Edwin  Boddington,  Archibald 
Russell,  ComeUus  Battelle,  James  W.  Baldwin,  Caleb  S.  Clay,  Wm.  S.  Kenyon, 
Geo.  P.  Sharp,  Benjamin  F.  Vallet,  and  Nicholas  Elmendorf. 

1851 
BROADWAY  SAVINGS  INSTITUTION,  NEW  YORK 

Chartered  June  20,  1851  (Chap.  245,  L.  1851).  Original  incorporators:  Jacob 
A.  Westervelt,  Schureman  Halstead,  David  A.  Wood,  Robert  Nunns,  John 
Falconer,  Francis  P.  Schoals,  Silas  C.  Herring,  Helmus  M.  Wells,  Wilson  G. 
Hunt,  Francis  W.  Edmonds,  Francis  A.  Palmer,  Benjamin  F.  Camp,  John 
Harper,  John  R.  Laurence,  John  T.  Fisher,  Leonard  Kirby,  James  S.  Libby, 
Lemuel  Bangs,  M.  Hopper  Mott,  Peter  Morris,  Wade  B.  Worrall,  John  B.  Cor- 
nell, and  Cornelius  L.  Everitt. 

1851 

ROME  SAVINGS  BANK 

Chartered  June  30,  1851  (Chap.  324,  L.  185 1).  Original  incorporators:  Har- 
vey Brayton,  Seth  Miller,  Russel  Fuller,  Squire  Utley,  Lewis  Rider,  James  S. 
Whaley,  Andrew  C.  Bettis,  Eri  Seymour,  Merit  Brooks,  Calvert  Comstock,  Nel- 
son J.  Beach,  Robert  B.  Doxtater,  and  Bloomfield  J.  Beach. 


APPENDIX  573 

1851 
IRVING  SAVINGS  INSTITUTION,  NEW  YORK 

Chartered  July  i,  1851  (Chap.  370,  L.  1851).  Original  incorporators:  Caleb 
S.  WoodhuU,  J.  Phillips  Phoenix,  Edgar  H.  Laing,  Henry  R.  Conkhn,  Wm.  Rad- 
ford, Abram  Wakeman,  Alexander  H.  Schultz,  Vanderbelt  L.  Buxton,  David  B. 
Moses,  Wm.  S.  Gregory,  John  Anderson,  Reuben  R.  Wood,  Henry  I.  Hart,  E. 
Tilden'  Blodgett,  Mason  Thomson,  Thomas  Carnley,  Wm.  A.  M.  PuUis,  Alex- 
ander McKenzie,  Warren  Chapman,  Henry  J.  Allen,  Charles  Jenkins,  Geo.  H. 
Bell,  David  Morrison,  Edmund  Griffin,  Wm.  Flagg,  Abraham  Fraze,  Horatio 
N.  Ferris,  Richard  F.  Carman,  and  John  Romer. 

1851 
WESTERN  SAVINGS  BANK,  BUFFALO 

Chartered  July  9, 1851  (Chap.  469,  L.  1851).     Original  incorporators:  Heman 

B.  Potter,  Gaius  B.  Rich,  Harry  Thompson,  Geo.  Palmer,  Israel  T.  Hatch,  Seth 

C.  Hawley,  George  C.  White,  Dean  Richmond,  Elijah  Ford,  Wm.  O.  Brown, 
Henry  K.  Smith,  Phihp  Beyer,  Rufus  C.  Palmer,  Francis  H.  Tows,  James 
Hollister,  George  W.  Tifft,  Nelson  K.  Hopkins,  Lewis  L.  Hodges,  John  R.  Lee, 
Henry  Martin,  and  Lucius  H.  Pratt. 

1852 
NEWBURGH  SAVINGS  BANK 

Chartered  April  13,  1852  (Chap.  252,  L.  1852).  Original  incorporators:  E. 
Ward  Farrington,  John  J.  Monell,  Chas.  U.  Cushman,  Robert  L.  Case,  Robert 
A.  Forsyth,  Richard  A.  Southwick,  Odell  S.  Hathaway,  Gilbert  C.  Monell,  David 
H.  Barclay,  Adam  Lilbum,  Samuel  W.  Eagar,  Comehus  C.  Smith,  Robert  Ster- 
ling, Robert  D.  Kemp,  Chas.  Drake,  David  Moore,  John  H.  Waters,  James  I. 
Crawford,  James  Patten,  Wm.  K.  Mailler,  Benjamin  Carpenter,  and  T.  M. 
Nevin. 

1852 

METROPOLITAN  SAVINGS  BANK,  NEW  YORK  CITY 

Incorporated  April  16, 1852  (Chap.  371,  L.  1852),  under  the  name  of  the  Mar- 
iners' Savings  Institution  in  the  City  of  New  York;  name  changed  February  8, 
1865,  to  the  Pacific  Savings  Bank  (though  never  used),  and  finally  changed  to  the 
Metropolitan  Savings  Bank,  New  York  City,  April  28,  1865.  Original  incor- 
porators: Peter  H.  Schenck,  Adonijah  J.  Underbill,  Russell  Dart,  Philip  W. 
Engs,  John  Y.  Cebra,  Hugh  Munro,  Samuel  Leeds,  Charles  Miles,  Francis  H. 
Abbott,  Edward  Bridge,  Isaac  T.  Smith,  Comehus  W.  Thomas,  Francis  B. 
O'Connor,  James  O.  Fish,  Joseph  Jamison,  Charles  L.  Vose,  Samuel  B.  Ashbey, 
James  W.  Elwell,  Wm.  H.  Hazard,  Nathaniel  L.  McCready,  Stephen  Gregory, 
James  J.  Nesmith,  and  Nathaniel  L.  James. 

i8S3 
WESTCHESTER  COUNTY  SAVINGS  BANK,  TARRYTOWN 

Chartered  July  21,  1853  (Chap.  591,  L.  1853).  Original  incorporators:  Na- 
thaniel B.  Holmes,  John  Thomas,  Elijah  Yerks,  James  W.  Smith,  Henry  Sheldon, 
Geo.  H.  Swords,  Chas.  F.  Harrison,  James  Watson  Webb,  Jacob  Storm,  Loyal 
S.  Pond,  Nathaniel  Bayles,  Bela  S.  Squires,  Uriah  Field,  Josiah  Q.  Fowler,  An- 
drew D.  Archer,  Sanford  Cobb,  Jr.,  G.  D.  Morgan,  Washington  Irving,  Edmund 
Coffin,  Shadrick  Taylor,  Cornelius  W.  Thomas,  Elisha  Horton,  and  Samuel  C. 
Nichols. 


574  APPENDIX 

1854 
BANK  FOR  SAVINGS,  OSSINING 

Chartered  March  9,  1854,  as  the  Sing  Sing  Savings  Bank  (Chap.  55,  L.  1854). 
Original  incorporators:  Benjamin  Brandreth,  Aaron  Ward,  William  Fail,  M. 
Churchill,  Benj.  Moore,  Stephen  Todd,  Rufus  L.  Todd,  David  Ludlam,  Jr., 
Joseph  Hunt,  James  W.  Robinson,  G.  H.  Brandreth,  and  C.  F.  Maurice. 

1854 
ERIE  COUNTY  SAVINGS  BANK 

Chartered  April  10,  1854  (Chap.  187,  L.  1854).  Original  incorporators:  Henry 
Roop,  Samuel  J.  Holley,  Stephen  W.  Howell,  Richard  Bullymore,  Chandler  J. 
Wells,  Hiram  Barton,  Abraham  D.  A.  Miller,  Wm.  C.  Sherwood,  William  Wilke- 
son,  Noah  P.  Sprague,  James  Hollister,  Stephen  V.  R.  Watson,  James  Wads- 
worth,  Noah  H.  Gardner,  Wm.  Fiske,  Gibson  T.  WilHams,  Myron  P.  Bush, 
Bradford  A.  Manchester,  James  C.  Harrison,  and  John  R.  Evans. 

1854 
YONKERS  SAVINGS  BANK 

Chartered  April  13, 1854  (Chap.  2x4,  L.  1854).  Original  incorporators:  Ethan 
Flagg,  Robert  P.  Getty,  John  H.  Williams,  Wm.  Radford,  Thos.  O.  Farrington, 
Horatio  P.  Prall,  JohnT.  Waring,  Edward  W.  Candee,  Henry  W.  Bashford,  Lem- 
uel W.  Wells,  Samuel  D.  Rockwell,  Wm.  L.  Atwater,  Wm.  N.  Seymour,  Bailey 
Hobbs,  Duncan  Macfarlane,  Charles  Archer,  Henry  F.  Devoe,  Geo.  Gilro}', 
Amos  W.  Gates,  James  C.  Bell,  James  L.  Valentine,  Joseph  S.  Hawkins,  Wm.  G. 
Ackerman,  John  Olmsted,  Robert  Grant,  Wm.  W.  Scrugham,  Jonathan  Odell, 
Benjamin  Brown,  Fielding  S.  Grant,  Joseph  H.  Jennings,  Geo.  H.  Bell,  Frederick 
A.  Coe,  Samuel  S.  Bairj',  John  Stilwell,  James  Scrymser,  Josiah  Rich,  Edward 
F.  Shounard,  Henry  A.  Underwood,  Lawrence  Post,  Jr.,  Jacob  Read,  and  Cor- 
nelius M.  Odell. 

1854 

NEW  YORK  SAVINGS  BANK 

Originally  incorporated  (as  the  Rose  Hill  Savings  Bank)  April  17,  1854  (Chap. 
394,  L.  1854).  Original  incorporators:  Samuel  Perry,  James  R.  Keeler,  Barrett 
H.  Van  Auken,  Wm.  H.  Piatt,  Alexander  H.  Freeman,  Peter  Y.  Cutler,  E.  S. 
Brown,  Alexander  M.  Lawrence,  Wm.  Good,  Thomas  Gumming,  Jr.,  Robt.  H. 
Gregory,  John  Sparks,  John  W.  Conklin,  Wm.  A.  Keeler,  George  Hencken,  Geo. 
C.  Baker,  and  Thomas  S.  Negus. 

1855 
ONONDAGA  COUNTY  SAVINGS  BANK,  SYRACUSE 

Chartered  April  10,  1855  (Chap.  259,  L.  1855).  Original  incorporators:  Allen 
Munroe,  James  L.  Bagg,  Robt.  G.  Wynkoop,  Geo.  Barnes,  Perry  Burdic,  James 
Foran,  John  W.  Barker,  Daniel  P.  Wood,  Wm.  E.  Abbott,  Harlow  W.  Chitten- 
den, Isaac  H.  Bronner,  Chas.  F.  Williston,  Edward  S.  Dawson,  John  Yorkey, 
Levi  W.  Hall,  Cornelius  L.  Alvord,  and  John  Fitzgerald. 

1855 
MECHANICS'  AND  FARMERS'  SAVINGS  BANK,  ALBANY 

Chartered  April  12,  1855  (Chap.  379,  L.  1855).  Original  incorporators: 
Thomas  W.  Olcott,  Wm.  L.  Marcy,  Wm.  11.  DeWitt,  Alden  March,  Thomas 
Olcott,  Alanson  Sumner,  Theo.  F.  Humphrey,  Ira  Harris,  John  F.  Rathbone, 
John  N.  Wilder,  and  William  Kent. 


APPENDIX  S7S 

1856 
ALBANY  EXCHANGE  SAVINGS  BANK 

Chartered  April  18,1856.  Original  incorporators :  Chauncey  P.  Williams,  Will- 
iam Gould,  Wm.  McElroy,  Samuel  Pruyn,  James  McNaughton,  Wra.  G.  Thomas, 
John  S.  Perry,  Alonzo  Bruce,  Lansing  Merchant,  Samuel  Anable,  Charles  E. 
Gifford,  Christopher  N.  Bender,  Charles  L.  Austin,  James  A.  Gray,  Thomas  W. 
Newcombe,  Joseph  M.  Lovett,  Sibboleth  B.  McCoy,  John  Stuart,  Gaius  M.  Blod- 
gett,  and  Isaac  A.  Chapman. 

1857 
FISHKILL  SAVINGS  INSTITUTION 

Chartered  February  25,  1857  (Chap.  52,  L.  1857).  Original  incorporators: 
Jireh  Steams,  Peter  McKinlay,  John  Jaycox,  Zachariah  V.  Hasbrouck,  Guernsey 
Smith,  Charles  Dubois,  Joseph  Cromwell,  Jr.,  John  Rothery,  Adolphus  Van  De- 
water,  Charles  Cook,  Joseph  I.  Jackson,  John  H.  Rosa,  Samuel  H.  Mead,  Lewis 
H.  White,  Halsey  F.  Wolcott,  Richard  H.  Brinckerhoff,  Samuel  A.  Hayt,  Coert 
A.  Van  Voorhis,  John  V.  Storm,  Alexander  Hasbrouck,  Wm.  H.  Wells,  Henry  D. 
Sherwood,  Geo.  F.  Sherman,  T.  Van  Wyck  Brinckerhoff,  James  E.  Van  Steen- 
burgh,  James  Mackin,  and  Theo.  R.  Wetmore. 


SOUTHOLD  SAVINGS  BANK 

Chartered  April  7,  1858  (Chap.  118,  L.  1858).  Original  incorporators:  Moses 
C.  Cleveland,  Wm.  H.  Wells,  John  S.  Howell,  Joseph  H.  Goldsmith,  Rensselaer 
T.  Goldsmith,  James  E.  Horton,  Ezra  L.  Goldsmith,  Nathaniel  Corwin,  Henry 
Hutting,  Albert  Albertson,  Franklin  H.  Overton,  Alvah  S.  Mulford,  David  L. 
Horton,  Hutchinson  H.  Case,  Therm  B.  Worth,  Henry  H.  Terry,  Israel  Peck, 
Ira  B.  Tuthill,  Henry  Pike,  Thomas  J.  Conklin,  and  Jeremiah  Goldsmith. 

1859 
OSWEGO  CITY  SAVINGS  BANK,  OSWEGO 

Chartered  March  4, 1859  (Chap.  28, L.  1859).  Original  incorporators:  Wm.  H. 
Herrick,  StephenH.  Lathrop,Wm.  H.  Wheeler,Thomas  Kingsford,  Royal  L.  Mack, 
Wm.  O.  Hubbard,  Orville  J.  Harmon,  John  N.  Collins,  Enoch  B.  Talcott,  Joel 
Turrill,  and  Sylvester  Doohttle. 

1859 
JEFFERSON  COUNTY  SAVINGS  BANK,  WATERTOWN 

Chartered  April  5,  1859  (Chap.  135,  L.  1859).  Original  incorporators:  Jason 
Clark,  Adriel  Ely,  James  I.  Steele,  Abner  Baker,  Bernard  Bagley,  Wm.Estes,  Pat- 
rick O'Dougherty,  Alonzo  Maxon,  Clark  Hewitt,  Ambrose  W.  Clark,  Orlen  Wheel- 
ock,  John  E.  Dodge,  Willard  Ives,  Benj.  F.  Hotchkiss,  Lafayette  E.  J.  Bigelow, 
Peter  Haas,  Charles  B.  Hoard,  MerrittAndrus,Chas.  D.  Smith,  Fred.  Emerson,  D. 
C.  Tomlinson,  and  John  L.  Marsh. 

1859 
GERMAN  SAVINGS  BANK,  NEW  YORK 

Chartered  April  9, 1859  (Chap.  210,  L.  1859).  Original  incorporators:  Daniel 
F.  Tiemann,  C.  Godfrey  Gunther,  August  Belmont,  John  W.  Schmidt,  Wm.  Jel- 
linghaus,  Henry  L.  Keyser,  Wm.  Auferman,  Wm.  Loeschigk,  R.  A.  Witthaus, 
Edwin  O.  Oelrichs,  Robert  Schell,  G.  Henry  Koop,  Augustus  Weismann,  Jacob 
Windmuller,  O.  Ottendorfer,  Anthony  Dugro,  Charles  Brueninghausen,  Chas. 
Brensing,  Geo.  Ebbinghausen,  Hieronomus  N.  Wilhelm,  F.  Wiegand,  Otto  Ernst, 
P.  Bissinger,  Theodore  Victor,  and  John  Loser. 


576  APPENDIX 

i8S9 
DIME  SAVINGS  BANK  OF  BROOKLYN 

Chartered  April  12, 1859  (Chap.  248,  L.  1859).  Original  incorporators:  Cyrus 
P.  Smith,  Daniel  Embury,  Harold  Dollner,  Josiah  O.  Low,  Moses  S.  Beach,  Isaac 
H.  Frothingham,  Elwood  Walter,  Moses  F.  Odell,  Geo.  Hall,  Wm.  W.  Edwards, 
Thomas  H.  Sandford,  Henry  Rowland,  Alanson  Track,  John  A.  Cross,  David 
Farley,  Wm.  Ellsworth,  Samuel  S.  Powell,  Peter  O'Hara,  Richard  Field,  Ed- 
wards W.  Fiske,  John  Halsey,  Sherman  H.  Sterling,  Adolph.  Koop,  Charles  J. 
Lowrey,  Conkhn  Brush,  Isaac  Carhart,  John  H.  Baker,  Jacob  H.  Sackman, 
Daniel  Chauncey,  Stephen  Hajoies,  and  Albert  H.  Osbom. 

1859 
UNION  DIME  SAVINGS  BANK,  NEW  YORK 

Chartered  April  12,  1859  (Chap.  247,  L.  1859).  Original  incorporators: 
Maltby  G.  Lane,  Geo.  Seeley,  Joseph  U.  Orvis,  Harrison  Hall,  Aaron  Close,  John 
McLean,  Francis  Frederick  Guenther,  Andrew  Bleakley,  Ezra  Smith,  Sillick 
Nichols,  Wm.  S.  Whitlock,  Edward  D.  Nelson,  Silas  B.  Dutcher,  James  Shaw, 
Chas  D.  Bailey,  Augustus  F.  Dow,  Wm.  T.  Hemmenway,  Henry  W.  Smith, 
Bradbury  M.  Johnson,  Emanuel  Schloss,  Gardner  S.  Chapin,  Napoleon  I. 
Haines,  Alexander  Rich,  Daniel  Buhler,  Eder  V.  Haughwout,  Wm.  S.  Fogg,  Solo- 
mon L.  Hull,  Charles  C.  Leigh,  Mathias  Clark,  John  Creighton,  Wm.  H.  Albert- 
son,  Wm.  Watt,  John  Wetterau,  and  Isaac  Dayton. 

1859 
QUEENS  COUNTY  SAVINGS  BANK,  FLUSHING 

Chartered  April  14, 1859  (Chap.  342,  L.  1859).  Original  incorporators :  Henry 
Clement,  Joseph  H.  King,  Abraham  Bloodgood,  John  D.  Locke,  Conrad  Pop- 
penhusen,  Edward  J.  Mann,  Alfred  C.  Smith,  William  Cock,  Luther  C.  Carter, 
Wm.  T.  Hemmenway,  Robert  B.  Parsons,  David  S.  Williams,  Spencer  H.  Smith, 
Robert  Lowden,  Chas.  A.  Hamilton,  Robert  Bell,  Wm.  H.  Peck,  James  B.  Par- 
sons, Wm.  H.  Roe,  Edward  A.  Lawrence,  Simon  W.  Bowne,  John  E.  Keeler, 
Frederick  W.  Lawrence,  Wm.  H.  Stiles,  Walter  Bowne,  Gilbert  C.  Halsted,  John 
H.  Brower,  Geo.  W.  Peck,  John  Cryder,  Peter  R.  Mumford,  Edward  E.  Mitchell, 
John  W.  Lawrence,  Rufus  Leavitt,  Cornell  Peck,  Walter  Jaggar,  James  M.  Low- 
erre,  Wm.  Chisholm,  Henry  A.  Bogert,  Wm.  H.  Wilkins,  and  Frederick  Koenig. 

1859 
PEEKSKILL  SAVINGS  BANK,  PEEKSKILL 

Chartered  April  18,  1859  (Chap.  432,  L.  1859).  Original  incorporators:  Geo. 
F.  Hussey,  Wm.  Nelson,  James  Brown,  George  Dayton,  Thomas  Southard,  Ed- 
ward Wells,  Truman  Minor,  Cyrus  Townsend,  James  B.  Brown,  Isaac  L.  Varian, 
Nehemiah  S.  Jacobs,  Chauncey  M.  Depew,Benj.  H.  Field,  Gilbert  B.  Hart,  Wm. 
Rufus  Nelson,  Uriah  Hill,  Jr.,  Calvin  Frost,  Daniel  J.  Haight,  Edwin  Briggs, 
Robert  A.  Depew,  Orrin  Frost,  John  Henry,  Edward  Underbill,  and  Saxton  Smith. 

i860 
CITIZENS'  SAVINGS  BANK,  NEW  YORK 

Chartered  April  5,  i860  (Chap.  166,  L.  i860).  Original  incorporators:  Mar- 
shall Lefferts,  Lorenzo  Draper,  John  A.  C.  Gray,  Fletcher  Westray,  Louis  Nau- 
mann,John  Bowne,  Sylvester  R.  Comstock,  T.  Bailey  Myers,  Theodore  G.  Glau- 
bensklee,  Chas.  F.  Briggs,  Samuel  C.  Swartz,  Edward  Robinson,  Jr.,  Chas.  T, 
Rodgers,  F.Willis  Fisher,  M.  D.,  Thomas  J.  Gilderslceve,  Daniel  Butterfield, 


APPENDIX  577 

P.  D.  Orvis,  Thurber  Bailey,  Frank  W.  Ballard,  VVm.  Rockwell,  M.  D.,  Francis 
M.  Harris,  Richard  C.  McCormick,  Andreas  Willman,  Royal  G.  Millard,  Fred- 
erick Schwedler,  Samuel  A.  Banks,  Geo.  R.  Howell,  Seymour  A.  Bunce,  James 
C.  Harriott,  and  Wm.  Ebbett. 

i860 

KING'S  COUNTY  SAVINGS  INSTITUTION,  BROOKLYN 

Chartered  April  10,  i860  (Chap.  214,  L.  i86o).  Original  incorporators:  Wm. 
Marshall,  Wm.  A.  Cobb,  John  Loughran,  John  M.  Furman,  Jonathan  H.  Stan- 
ston,  Andrew  B.  Hodges,  Frederick  Scholes,  Henry  E.  Ripley,  Thomas  C.  Moore, 
Thomas  W.  Field,  Charles  H.  Fellows,  Geo.  C.  Bennett,  Jacob  Zimmer,  John 
Schneider,  Geo.  B.  McGrath,  and  Jeremiah  Johnson,  Jr. 

i860 
RHINEBECK  SAVINGS  BANK,  RHINEBECK 

Chartered  April  12,  i860  (Chap.  336,  L.  i860).  Original  incorporators:  Will- 
iam Kelly,  Lewis  Livingston,  Freeborn  Garrettson,  Joshua  Bowne,  Wm.  B. 
Piatt,  James  A.  A.  Cowles,  Egbert  Statas,  Robert  Massoneau,  Ambrose  Wager, 
John  N.  Cramer,  Homer  Gray,  John  Glestrom,  Alfred  Drury,  Jacob  G.  Lambert, 
Wm.  H.  Brown,  Tunis  Wartman,  George  Veitch,  William  Cross,  William  Car- 
roll, and  Thomas  Edgerly. 

i860 
SAG  HARBOR  SAVINGS  BANK,  SAG  HARBOR 

Chartered  April  12,  i860  (Chap.  312,  L.  i860).  Original  incorporators:  David 
Congdon,  Nathan  N.  Tiffany,  Wickham  S.  Havens,  Wm.  Buck,  John  Sherry,  J. 
Madison  Hunting,  Wm.  H.  Gleason,  Edwin  Rose,  Thomas  E.  Crowell,  Jonathan 
Fithian,  Geo.  B.  Brown,  Abel  C.  Buckley,  Geo.  W.  Hunting,  Jonas  Winters, 
James  L.  Haines,  Philander  R.  Jennings,  John  C.  Hedges,  Chas.  N.  Brown,  Jason 
M.  Terbell,  Nathaniel  Topping,  Wm.  Adams,  Elisha  King,  Isaac  W.  Osbom, 
Jedediah  Conkling,  Joshua  B.  Nickerson,  Jeremiah  T.  Parsons,  Gilbert  H. 
Cooper,  Nathan  P.  Howell,  David  H.  Huntling,  and  Alanson  Topping. 

i860 
FRANKLIN  SAVINGS  BANK,  NEW  YORK 

Chartered  April  14,  i860  (Chap.  409,  L.  i860).  Original  incorporators:  Leb- 
beus  B.  Ward,  Joseph  Potter,  Charles  G.  North,  Thomas  M.  Patridge,  Geo.  T. 
Cobb,  Francis  B.  Guest,  Alfred  T.  Serrell,  Oliver  H.  Lee,  John  M.  Grane,  Theo- 
dore Hyatt,  Benjamin  P.  Fairchild,  John  F.  Betz,  Patrick  Treacy,  Samuel  Newby, 
George  Crouch,  James  Moore,  Geo.  H.  Beyer,  Henry  McLean,  Andrew  V. 
Stout,  Henry  Bucking,  Peter  Valentine,  John  O'Neil,  Matthew  Helck,  David 
R.  Doremus,  Christopher  Hitzelburger,  Oliver  Charlick,  Amos  M.  Lyon,  James 
F.  Chamberlain,  Jeremiah  Crowley,  Thomas  L.  Braynord,  John  B.  Hillyer, 
Noah  A.  Childs,  and  John  O'Keefe. 

i860 
EAST  BROOKLYN  SAVINGS  BANK,  BROOKLYN 

Chartered  April  17,  i860  (Chap.  496,  L.  i860).  Original  incorporators:  Samuel 
C.  Barnes,  Barnet  Johnson,  John  M.  Phelps,  Edwin  H.  Mead,  Joseph  Oliver, 
Thomas  D.  Hudson,  Egbert  K.  VanBuren,  Seymour  L.  Husted,  Charles  Halsey, 
Jeremiah  J.  Rappelj'ea,  Jeremiah  Johnson,  Henry  Boerum,  William  Halsey, 
James  H.  Hutchings,  James  M.  Green,  Frederick  Scholes,  and  Richard  Olmstead. 


578  APPENDIX 

1863 
HARLEM  SAVINGS  BANK,  NEW  YORK 

Chartered  April  17, 1863  (Chap.  175,  L.  1863).  Original  incorporators:  Daniel 
T.  Tieman,  Jordan  L.  Mott,  Cornelius  W.  Van  Voorhis,  Levi  Adams,  Bartlett 
Smith,  Henry  G.  Hadden,  Wm.  Brown,  Samuel  A.  Hills,  Louis  Bro?i,  Charles 
Boice,  Thomas  B.  Tappen,  A.  P.  Wilson,  Henry  P.  McGown,  Louis  Hart,  E.  S. 
Marshall,  Jacob  M.  Long,  Andrew  Smith,  Charles  B.  Tooker,  George  Ebert, 
Edward  Jones,  Alexander  Lytic,  J.  O.  Terrington,  William  Klinoz,  J.  W.  Gilley, 
Henry  Schubert,  Spencer  Gregory,  Henry  Baumen,  and  J.  Rosenbourgh. 

1864 
STATEN  ISLAND  SAVINGS  BANK,  STAPLETON 

Chartered  April  6, 1864  (Chap.  129,  L.  1864).  Original  incorporators:  Will- 
iam Fellows,  Geo.  Francis  Shaw,  David  J.  Gardner,  Thomas  Conrad,  Wm.  Carey, 
Geo.  B.  Davis,  John  Bechtel,  Wm.  C.  Anderson,  Dwight  Townsend,  John  Lewis, 
Dennis  Keeley,  Henry  M.  Weed,  Abraham  EUis,  Jacob  B.  Ward,  and  Wm.  Mc- 
Lean. 

1864 

CAYUGA  COUNTY  SAVINGS  BANK,  AUBURN 

Incorporated  April  16,  1864,  as  the  Mutual  Savings  Bank  of  Auburn  (Chap. 
212,  L.  1864).  Name  changed  to  the  Cayuga  County  Savings  Bank,  of  Auburn, 
July  I,  1875.  ,     ^ 

Original  incorporators:  James  S.  Seymour,  Augustus  Howland,  Cyrus  C. 
Dennis,  Elmore  P.  Ross,  Edwin  B.  Morgan,  Corydon  H.  Merriman,  Christopher 
Morgan,BenjaminB.  Snow,  Wm.H.  Seward,  Jr.,TheodoreM.Pomeroy,HoraceT. 
Cook,  Samuel  Adams,  GumseyJewitt,Horatio  J.  Brown,  David  Tompkins,  Daniel 
Hewson,  and  Morel  S.  Fitch. 

1864 

DIME  SAVINGS  BANK  OF  WILLLAMSBURGH,  BROOKLYN 

Chartered  April  19,  1864  (Chap.  239,  L.  1864).  Original  incorporators:  Wm. 
Grandy,  Wm.  W.  Armfield,  John  R.  Jurgens,  Geo.  B.  Smith,  Joseph  W.  Thomas, 
Wm.  Marshall,  James  Pell,  James  Broughton,  Silas  W.  Brainard,  Geo.  W.  Kel- 
sey,  Geo.  Nichols,  Peter  M.  Dingee,  James  Forster,  Isaac  Bamber,  Adam  Craig, 
Wm.  M.  Raymond,  Adolph  E.  Jacobson,  Edward  Burcham,  Frederick  Nisl- 
witz,  Henry  Harmon,  C.  E.  Bertand,  Sigismund  Kaufman,  and  Robert  Butcher. 

1865 
PORT  CHESTER  SAVINGS  BANK 

Chartered  March  14,  1865  (Chap.  119,  L.  1865).  Original  incorporators: 
Philip  Rollhaus,  Amherst  Wight,  Jr.,  Robert  McNeil,  Wm.  E.  Ward,  Ephraim 
Sours,  Wm.  P.  Abendroth,  Geo.  H.  Lounsbury,  Alvah  A.  Lyon,  Wm.  L.  Bush, 
Richard  Vaughn,  Samuel  K.  Satterlee,  Daniel  Strang,  John  E.  Marshall,  John 
W.  Mills,  Wm.  P.  Van  Rensselaer,  and  James  Shea. 

1866 
ONEIDA  SAVINGS  BANK 

Chartered  February  19,  1866  (Chap.  53,  L.  1866).  Original  incorporators: 
James  Bamett,  Ralph  H.  Avery,  John  J.  Foote,  John  M.  Wilson,  Thompson  E. 
Barnes,  Geo.  H.  Sanford,  Samuel  Breeze,  James  A.  Bennett,  Theodore  F.  Hand, 
Edward  C.  Saunders,  George  Berry,  Goodwin  P.  Loper,  Timothy  G.  Seeley, 
Milton  Bamett,  Ambrose  Hill,  I.  N.  Messenger,  and  Daniel  G.  Dorrance. 


APPENDIX  579 

1866 
MIDDLETOWN  SAVINGS  BANK 

Chartered  March  5,  1866  (Chap.  104,  L.  1866).  Original  incorporators:  Ed- 
ward M.  Madden,  Horatio  R.  Wilcox,  Wm.  M.  Graham,  John  G.  Wilkin,  James 
B.  Hulse,  Joshua  Draper,  Charles  C.  McQuaid,  EHsha  P.  Wheeler,  Leander 
Crawford,  Israel  H.  Wickham,  Wm.  Evans,  Charles  B.  Roosa,  Benjamin  W. 
Shaw,  Hiram  Brink,  Jonathan  M.  Matthews,  Selah  R.  Corwin,  Halstead  Sweet, 
Wm.  S.  Webb,  John  H.  Bell,  Coe  Robertson,  and  Charles  H.  Van  Wyck. 

1866 
MECHANICS'  SAVINGS  BANK,  BEACON 

Chartered  March  5,  1866  (Chap.  103,  L.  1866).  Original  incorporators:  Wal- 
ter Brett,  John  Rothery,  Wm.  C.  Oakley,  James  Mackin,  R.  D.  Hine,  T.  J.  B. 
Schenck,  Joseph  Howiand,  David  Davis,  Joseph  Lomas,  Wm.  S.  Verplanck, 
John  F.  Gerou,  John  Boyce,  Henry  H.  Hustis,  Horatio  N.  Swift,  Thomas  Al- 
dridge,  Milo  Sage,  Lewis  B.  Ferguson,  John  T.  Smith,  Wm.  H.  Rogers,  Wm.  B. 
Budd,  Lyman  Robinson,  James  E.  Member,  Wm.  N.  Vanderwerker,  Daniel 
Brinkerhofif,  and  John  Jav  Cox. 

1866 

PEOPLE'S  SAVINGS  BANK,  YONKERS 

Chartered  April  5,  1866  (Chap.  405,  L.  1866).  Original  incorporators:  Robert 
J.  Douglass,  Andrew  Archibald,  Orrin  A.  Bills,  Jonathan  Vail,  Wm.  Radford, 
Wm.  B.  Edgar,  Geo.  B.  Skinner,  James  P.  Sanders,  Wm.  Macfarlane,  Geo.  F. 
Coddington,  John  Phillips,  Thomas  F.  Morris,  Eli  S.  Seger,  Nelson  Ackert,  Levi 
P.  Rose,  Henry  F.  Brevoort,  Peter  U.  Fowler,  Michael  W.  Rooney,  Clinton  M. 
Davis,  Geo.  B.  Pentz,  and  James  W.  Mitchell. 

1866 
CORTLAND  SAVINGS  BANK 

Chartered  April  13, 1866  (Chap.  557,  L.  1866).  Original  incorporators:  Wm. 
R.  Randall,  Hiram  J.  Messenger,  Thomas  Keator,  Jedediah  Barber,  Geo.  W. 
Bradford,  Perrin  H.  McGraw,  Henry  Stephens,  Frederick  Hyde,  Horatio  Bal- 
lard, Henry  S.  Randall,  R.  Holland  Duell,  Hiram  Crandall,  Horace  P.  Goodrich, 
James  W.  Sturtevant,  Alphonzo  Stone,  Silas  Blanchard,  Raymond  P.  Babcock, 
Nathan  Smith,  Daniel  E.  Whitmore,  and  Stephen  Patrick. 

1866 
SKANEATELES  SAVINGS  BANK 

Chartered  April  16, 1866  (Chap.  600,  L.  1866).  Original  incorporators:  Rich- 
ard Tallcott,  Anson  Lapham,  Charles  Pardee,  Joel  Thayer,  Henry  L.  Roosevelt, 
Caleb  W.  Allis,  John  Barrow,  Josiah  Garlock,  Henrj^  T.  Webb,  Henry  J.  Hub- 
bard, Thomas  Isom,  Jr.,  Leonard  H.  Earll,  Ezekiel  B.  Hoyt,  Geo.  H.  Earll,  and 
Jacob  L.  Clif t. 

1866 

JAMAICA  SAVINGS  BANK 

Chartered  April  20,  1866  (Chap.  717,  L.  1866).  Original  incorporators:  John 
A.  King,  James  A.  Fleury,  Morris  Fosdick,  Aaron  A.  Degrauw,  Wm.  Phraner, 
John  J.  Armstrong,  James  Rider,  James  H.  Elmore,  Daniel  Garrison,  Stephen  L. 
Spader,  Wm.  A.  Lighthall,  Wm.  Durland,  John  Gracy,  John  O'Donnell,  Sr., 
Martin  J.  Duryea,  John  W.  Demott,  Ascan  Backus,  John  H.  Seaman,  and  John 
N.  Brinckerhoff. 


58o  APPENDIX 

1866 
NORTH  RIVER  SAVINGS  BANK,  NEW  YORK 

Chartered  April  20, 1866  (Chap.  739,  L.  1866).  Original  incorporators:  Martin 
Thatcher,  Geo.  W.  Palmer,  Samuel  B.  Garvin,  John  Hooper,  James  W.  Ranney, 
M.D.,  Alexander  Wilder,  Samuel  W.  Sears,  John  Graham,  Theron.  R.  Butler, 
Robert  Usher,  Jr.,  Henry-  J.  Seaman,  Charles  M.  Whiley,  Matthew  McDougall, 
George  Keyes,  C.  Y.  Wemple,  Edward  Schlichting,  Charles  Kochler,  James  O. 
Bennett,  Meyer  Eiseman,  John  Holzderber,  Frederick  Schutz,  Robert  L.  Darragh, 
Henry  Richard,  Adolphus  C.  Rau,  Gustavus  Levy,  A.  Sidney  Doane,  Edmond 
Connelly,  and  Edson  F.  Emery. 

1866 

GERMAN  SAVINGS  BANK,  BROOKLYN 

Chartered  April  20, 1866  (Chap.  714,  L.  1866).  Original  incorporators:  Joseph 
Wilde,  Wm.  Broistedt,  Geo.  H.  Fisher,  John  Wills,  Thomas  Cotrell,  John  Raber, 
J.  A.  G.  Comstock,  Jacob  Fint,  Francis  Swift,  Frederick  W.  Kalbfleisch,  Geo. 
Destler,  Edward  A.  Jones,  Carl  Wittman,  Jacob  Rosengarden,  Frederick  Fries, 
Herman  Thieme,  Edward  Roehr,  John  Vv'igand,  Louis  Zechiel,  Gottlieb  Engels, 
and  John  J.  Hallenbeck. 

1807 

MECHANICS'  SAVINGS  BANK,  ROCHESTER 

Incorporated  April  17, 1867  (Chap.  411,  L.  1867).  Original  incorporators:  Geo. 
R.  Clark,  Patrick  Barry,  Lewis  Selye,  Thomas  Parsons,  Geo.  J.  Whitney,  Geo.  G. 
Cooper,  Jarvis  Lord,  Samuel  Wilder,  Martin  Rcid,  David  Upton,  Chas.  H.  Chopin, 
Gihnan  H.  Perkins,  Hamlet  Scranton,  Ohver  Allen,  Edward  M.  Smith,  Abram  S. 
Mann,  Charles  J.  Burke,  Chauncey  B.  Woodworth,  A.  Carter  Wilder,  James  M. 
Whitney,  and  Eleazcr  E.  Sill. 

1867 

BINGHAMTON  SAVINGS  BANK 

Chartered  April  18,  1867  (Chap.  423,  L.  1867).  Original  incorporators:  Fred- 
erick Lewis,  Horace  S.  Griswold,  Cyrus  Strong,  Oliver  C.  Crocker,  Wm.  E.  Tay- 
lor, Harris  G.  Rodgers,  Chas.  W.  Sanford,  Erasmus  D.  Robinson,  Wm.  P.  Pope, 
Abel  Beimett,  Louis  Seymour,  Henry  Mather,  and  Horace  N.  Lester. 


GERMANIA  SAVINGS  BANK,  BROOKLYN 

Chartered  April  19,  1867  (Chap.  466,  L.  1867).  Original  incorporators:  Ed. 
Unkart,  Herrman  Ackerman,  John  G.  A.  Vagt,  Theodore  Happel,  Richard  Forst- 
mann,  Oscar  Strasburger,  Carl  C.  Recknagel,  W.  G.  Taaks,  F.  A.  Schroeder,  D. 
Westfall,  U.  Palmedo,  August  Siburg,  Fried  Hitzelberger,  John  Ruck,  Wm.  D. 
Veeder,  Aug.  Kurth,  Richard  Barthelmess,  Geo.  Tiemann,  Ivan  Von  Auw,  F.  A. 
Stohlmann,  J.  E.  Stohlman,  I.  K.  Limburger,  Emil  Magnus,  S.  Zollinger,  P.  K. 
Weitzel,  Henry  Schutte,  Theodore  Juncke,  S.  W.  Boden,  C.  G.  Giebel,  Martin 
Von  Hagen,  and  Francis  Keyser. 

1867 

CHENANGO  VALLEY  SAVINGS  BANK,  BINGHAMTON 

Chartered  April  20,  1867  (Chap.  477,  L.  1867,  which  revived  and  continued  in 
force  Chapter  6i6,  Laws  of  1857).  Original  incorporators:  Simon  C.  Hitchcock, 
Benj.  N.  Loomis,  Henry  Mather,  Joseph  Ely,  Ransom  Balcom,  Richard  Mather, 
Albert  Way,  Henry  S.  Hitchcock,  Isaac  L.  Bartlett,  Lewis  Sejinour,  Hiram  M. 
Myer,  W.  N.  Wilson,  Hallam  E.  Pratt,  Charles  McKinney,  Augustus  Morgan, 
Sherman  D.  Phelps,  Giles  W.  Hotchkiss,  and  Martin  Stone. 


APPENDIX  s8i 


RONDOUT  SAVINGS  BANK,  KINGSTON 

Chartered  March  24,  1868  (Chap.  50,  L.  1868).  Original  incorporators: 
Thomas  Cornell,  Wm.  Kelly,  James  G.  Lindsley,  Henry  A.  Sampson,  Lorenzo 
A.  Sykes,  Walter  B.  Crane,  Roeliff  Eltinge,  Augustus  Schoonmaker,  Jr.,  John 
Derenbacker,  John  Maxwell,  Wm.  H.  Gedney,  Samuel  D.  Coykendall,  Michael 
J.  Madden,  Hiram  Schoonmaker,  Robert  H.  Atwater,  Nathaniel  Booth,  Edward 
Tompkins,  Frederick  Stephan,  Jacob  Hermance,  Thomas  Murray,  and  Henry 
D.  H.  Snyder. 


1868 
CATSKILL  SAVINGS  BANK 

Chartered  April  i,  1868  (Chap.  96,  L.  1868).  Original  incorporators:  S.  Sher- 
wood Day,  John  Breastead,  Samuel  Harris,  Rufus  H.  King,  Jacob  H.  Meech, 
George  Griffin,  EUjah  P.  Bushnell,  Frederick  Cook,  John  H.  Bagley,  Jr.,  Burton 
G.  Morse,  John  A.  Griswold,  Luke  Roe,  Edwin  M.  Hubbell,  Sheldon  A.  Givens, 
Charles  L.  Beach,  George  Beach,  George  Robertson,  Isaac  Pruyn,  John  M.  Don- 
nelly, Francis  N.  Willson,  Nelson  Fanning,  Manly  B.  Mattice,  Edgar  Russell, 
and  Joseph  Hallenbeck. 


1868 
ITHACA  SAVINGS  BANK 

Chartered  April  3, 1868  (Chap.  141,  L.  1868,  which  revived  Chapter  176,  Laws 
of  1863,  and  chapter  93,  Laws  of  1864).  Original  incorporators:  Ezra  Cornell, 
Douglass  Boardman,  John  H.  Selkreg,  Wm.  Andrus,  Joseph  Esty,  John  Rum- 
sey,  John  L.  Whiton,  Leonard  Treman,  Obadiah  B.  Curran,  Geo.  W.  Schuyler, 
and  Wesley  Hooker. 


1868 
GREENPOINT  SAVINGS  BANK,  BROOKLYN 

Chartered  April  16,  1868  (Chap.  210,  L.  1868).  Original  incorporators:  Ne- 
ziah  Bhss,  Wm.  M.  Messerole,  Edward  F.  WilHams,  Geo.  W.  Watts,  Christian 
H.  Koch,  Archibald  K.  Messerole,  Claus  Olandt,  Piatt  C.  IngersoU,  James  W. 
Valentine,  Jonathan  Moore,  Thomas  P.  Smith,  Archibald  M.  Bliss,  Samuel  S. 
Free,  John  D.  Jones,  Nathaniel  S.  Bailey,  Andrew  J.  Hermion,  Daniel  D.  Boyce, 
Thomas  F.  Rowland,  Carl  Feitzinger,  Geo.  S.  Barton,  Adam  Metz,  Francis 
Street,  Charles  Von  Bergen,  Geo.  H.  Stone,  and  William  H.  Peer. 


1868 
NATIONAL  SAVINGS  BANK,  ALBANY 

Chartered  May  6,  1868  (Chap.  662,  L.  1868).  Original  incorporators:  Adam 
Van  Allen,  John  H.  Reynolds,  John  Tweddle,  Rufus  W.  Peckham,  Matthew  H. 
Read,  William  H.  Taylor,  Erastus  Corning,  William  A.  Rice,  Robert  L.  Banks, 
Albion  Ransom,  John  H.  Van  Antwerp,  James  Edwards,  Joseph  Packard,  Edwin 
W.  Corning,  Isaac  Edwards,  Benjamin  A.  Towner,  and  John  J.  Conroy. 


582  APPENDIX 


EAST  NEW  YORK  SAVINGS  BANK,  BROOKLYN 

Chartered  May  8,  i868  (Chap.  753,  L.  1868).  Original  incorporators:  Gilliam 
Schenck,  Ditmas  Jewell,  Williamson  Rapalje,  Isaac  C.  Schenck,  Stephen  L.  Van- 
derveer,  James  L.  Williams,  Christopher  I.  Lott,  John  I.  Sackmann,  Henry  L. 
Wyckoff,  Abraham  Lynington,  John  S.  Andrews,  Samuel  Davies,  Peter  J.  Ber- 
gen, John  C.  Schenck,  Philip  H.  Reid,  Herman  H.  Kattenhom,  James  PiUing, 
Francis  Lauzer,  Stephen  P.  StoothofiF,  Wm.  Kramer,  James  McGuire,  Horace 
A.  Miller,  Charles  W.  Hamilton,  WiUiamson  Rapalje,  Jr.,  Louis  Altenbrand, 
Martin  Bennett,  Jr.,  and  Noyes  G.  Palmer. 

1868 
WESTSIDE  SAVINGS  BANK,  NEW  YORK 

Chartered  May  19, 1868  (Chap.  840,  L.  1868).  Original  incorporators:  Fred- 
erick A.  Conkling,  Ignatius  Flynn,  Abram  Leut,  Robert  W.  S.  Bonsell,  Edward 
Lynch,  James  Dignon,  Thomas  Kivlin,  Peter  Brunges,  Thomas  C.  Finnell,  James 
R.  Floyd,  John  Dargavel,  Wm.  H.  Christie,  James  Boyle,  John  Hessian,  Geo.  A. 
Mitchell,  Thomas  D.  Conroy,  Harris  Bogart,  Daniel  Coyle,  David  S.  Page,  Geo. 
Ackerman,  Wm.  McKay,  James  S.  Scofield,  Alexander  Gaw,  Samuel  Mott,  Geo. 
J.  Thompson,  Vincent  C.  King,  Walter  W.  Price,  James  Watson,  John  F.  Cleve- 
land, Maurice  J.  Power,  Wm.  C.  Hanna,  Alfred  West,  James  Winterbottom,  and 
Richard  Field. 


ELMIRA  SAVINGS  BANK 

Chartered  March  19,  1869  (Chap.  58,  L.  1869)  as  the  "Southern  Tier  Savings 
Bank,  in  the  City  of  Elmira,  Chemung  County."  Original  incorporators: 
Solomon  L.  Gillet,  James  H.  Loring,  David  Decker,  Reuben  H.  Ransom,  Harden 
D.  V.  Pratt,  Jackson  Richardson,  Thomas  Gerrity,  James  S.  Thurston,  Joseph 
Davis,  Rufus  King,  Henry  V.  Colt,  John  J.  Curtis,  and  Francis  A.  Stowell. 

1869 
EAST  SIDE  SAVINGS  BANK,  ROCHESTER 

Chartered  April  7,  1869  (Chap.  135,  L.  1869).  Original  incorporators:  Isaac 
F.  Quinby,  Horatio  G.  Warner,  Darius  Perrin,  Henry  S.  Hebard,  Hiram  Davis, 
Michael  Filon,  Nehemiah  P.  Osborn,  Wm.  N.  Emerson,  Hector  McLean,  Ed- 
mund Ocumpaugh,  James  Vick,  Elias  Wolff,  Truman  A.  Newton,  J.  Moreau 
Smith,  PHney  M.  Bromley,  Wm.  A.  Hubbard,  Aramiah  Moseley,  Abner  Green 
David  R.  Barton,  Erastus  Danow,  and  Henry  Lampert. 


1869 
ELLENVILLE  SAVINGS  BANK 

Chartered  April  19, 1869  (Chap.  242,  L.  1869).  Original  incorporators:  John 
J.  BilUngs,  Joseph  H.  Tuthill,  Geo.  A.  Dudley,  Geo.  H.  Smith,  Jacob  Hermance, 
Judson  Shultz,  Gilbert  DuBois,  Abijah  Otis,  James  B.  Childs,  Albert  Corbin, 
John  H.  Divine,  Andrew  S.  Schoonmaker,  Samuel  Wilkinson,  James  O.  Schoon- 
maker,  John  C.  Hoombeck,  Justus  Humphrey,  Andrew  Brodhead,  William  R. 
Rose,  John  D.  Watkins,  Geo.  B.  Childs,  Gilbert  Palen,  Eli  Van  Keuren,  and  Har- 
vey R.  Morris. 


APPENDIX  583 

1869 
WAPPINGER  SAVINGS  BANK 

Chartered  April  23,  1869  (Chap.  299,  L.  1869).  Original  incorporators:  J, 
Nelson  Luckey,  Samuel  W.  Johnston,  Irving  Grinnell,  Josiah  Falkner,  Samuel 
Brown,I.  T.  Nichols, Thomas  W.  Jaycocks,  J.  D.  Harcourt,  Elias  Brown,  Clayton 
E.  Sweet,  Henry  Mesier,  Edward  M.  Goring,  Andrew  Jackson,  Abraham  D. 
Smith,  Wm.  B.  Millard,  Benj.  Clapp,  Henry  Suydam,  A.  W.  Armstrong,  Francis 
Myers,  Dennis  Shehan,  Z.  V.  Hasbrook,  John  R.  Phillips,  and  Daniel  McKinlay. 

1869 
ONEIDA  COUNTY  SAVINGS  BANK,  ROME 

Chartered  May  i,  1869  (Chap.  480,  L.  1869).  Original  incorporators:  Samuel 
B.  Stevens,  Alfred  Ethridge,  John  J.  Parry,  Henry  Hager,  John  F.  Mix,  Henry 
Johnson,  James  Walker,  Alfred  Sandford,  Charles  E.  Frazer,  Harold  H.  Pope, 
Henry  R.  Hill,  Thomas  D.  Roberts,  and  Samuel  Tuttle. 

1869 
GREENBURGH  SAVINGS  BANK,  DOBBS  FERRY 

Chartered  May  8,  1869  (Chap.  729,  L.  1869).  Original  incorporators:  Abram 
O.  Wilsea,  D.  Ogden  Bradley,  Thomas  L.  Jewell,  Peter  M.  Biegen,  James  Pat- 
terson, Benjamin  Lynt,  James  Wilde,  Jr.,  John  D.  McKenzie,  Geo.  L.  Osborne, 
Geo.  B.  Taylor,  Geo.  Schmidt,  Charles  G.  Storms,  Hugh  Downey,  John  King, 
and  Leonard  W.  Lawrence. 

1869 

EXCELSIOR  SAVINGS  BANK,  NEW  YORK 

Chartered  May  ii,  1869  (Chap.  863,  L.  1869).  Original  incorporators:  Walter 
W.  Price,  Vincent  C.  King,  James  Watson,  Emanuel  B.  Hart,  Richard  Field, 
Edward  Henry,Henry  S.  Osborn, Frank  M.  Bixby, Daniel  Coyle,  Ignatius  Flynn, 
Wm.  M.  Giles,  Michael  Watson,  John  W.  Bockhom,  Thomas  Loughran,  Michael 
Connolly,  Bernard  Ackerman,  John  F.  Pupke,  Hugh  Murray,  Erastus  Little- 
field,  Seth  M,  Harris,  Horace  K.  Thurber,  Henry  Welsh,  Wm.  A.  Hare.  Elias 
R.  Lawrence,  Henry  Harms,  and  Peter  Brunjes. 

1870 
OSWEGO  COUNTY  SAVINGS  BANK 

Chartered  May  6,  1870  (Chap.  734,  L.  1870).  Original  incorporators:  John 
B.  Edwards,  Alanson  S.  Page,  Cheney  Ames,  Delos  De  Wolf,  Gilbert  E.  Parsons, 
Charles  Doohttle,  Wm.  Wales,  Alonzo  H.  Failing,  J.  Lawrence  McWhorter, 
Benjamin  S.  Stone,  Geo.  B.  Sloane,  Harvey  Palmer,  Peter  Lappin,  Charles 
Rhodes,  Samuel  B.  Johnson,  Benjamin  C.  Turner,  John  H.  Mann,  Moses  Merick, 
Chas.  H.  Cross,  Andrew  Miller,  Cornelius  Wendell,  Robert  Scott,  O.  M.  Bond, 
D.  L.  Couch  and  John  Dunn,  Jr. 

1870 
SENECA  FALLS  SAVINGS  BANK 

Chartered  May  6,  1870  (Chap.  695,  L.  1870).  Original  incorporators:  Jacob 
P.  Chamberlain,  Erastus  Partridge,  William  Johnson,  LeRoy  C.  Partridge,  John 
P.  Cowing,  Albert  Jewett,  Wm.  A.  Swaby,  Frank  Chamberlain,  and  George  B. 
Daniels. 


584  APPENDIX 

1870 
PAWLING  SAVINGS  BANK 

Chartered  May  7,  1870  (Chap.  744,  L.  1870).  Original  incorporators:  Albert 
J.  Akin,  John  J.  Vanderburgh,  John  B.  Dutcher,  Jackson  W.  Bowditch,  J.  Wes- 
ley Stark,  Edgar  J.  Hurd,  Wilham  H.  Taber,  Herman  Ferris,  Geo.  W.  Chase, 
Morgan  Horton,  Patrick  W.  Tanday,  Nathaniel  Pierce,  Jeremiah  Denton,  Her- 
man Bancroft,  Albert  W.  Corbin,  Homer  Chapman,  Jedediah  Wanzer,  Richard 
Osbom,  Benj.  V.  Haviland,  Thomas  Wheeler,  and  David  R.  Gould. 

1870 
FARMERS'  AND  MECHANICS'  SAVINGS  BANK,  LOCKPORT 

Chartered  May  11,  1870  (Chap.  779,  L.  1870).  Original  incorporators:  Robert 
Dunlap,  Erastus  S.  Mack,  James  Richmond,  John  T.  Murray,  Asa  W.  Douglas, 
Jason  Collier,  Chas  H.  Francis,  Ransom  M.  Skeels,  Moses  C.  Richardson,  John 
Hodge,  Lewis  S.  Payne,  Edmund  Voke,  Moses  G.  Swift,  Silas  Osgood,  and 
Stephen  Wilson. 

1871 
MATTEAWAN  SAVINGS  BANK,  BEACON 

Incorporated  March  21,  1871  (Chap.  142,  L.  1871).  Original  incorporators: 
Willard  H.  Mase,  Lewis  Tompkins,  Henry  B.  Schenck,  John  F.  Gerow,  David 
Davis,  Adolphus  Vandewater,  Francis  R.  Masters,  Daniel  Green,  Lyman  Robin- 
son, John  Mellor,  Martin  Ryan,  Harvey  Brett,  Linde  Belknap,  Benjamin  T. 
Hall,  John  Boyce,  John  Halgin,  Christopher  A.  Farrel,  Wm.  Jackson,  Wm.  C. 
Harris,  Henry  A.  Alden,  and  Charles  W.  Tompkins. 

1871 
EAST  CHESTER  SAVINGS  BANK,  MOUNT  VERNON 

Chartered  March  8, 1871  (Chap.  78,  L.  1871).  Original  incorporators:  Archi- 
bald Allerton,  John  H.  Price,  John  M.  Masterton,  David  Allerton,  Henry  S. 
Murray,  Cornelius  Corson,  Wm.  H.  Pemberton,  Columbus  S.  Stevenson,  James 
T.  Husted,  James  H.  Ingersoll,  Chas.  E.  Wilbour,  Wm.  A.  Seaver,  and  Daniel 
Clark. 

1871 
NEW  PALTZ  SAVINGS  BANK 

Chartered  March  22,  1871  (Chap.  158,  L.  1871).  Original  incorporators: 
Daniel  L.  Heaton,  Zachariah  Bru>Ti,  Jacob  Lefevre,  Josiah  J.  Hasbrouck,  Ed- 
mund Bruyn,  Thaddeus  Hait,  Derick  W.  Du  Bois,  Elijah  Woolsey,  Oscar  Has- 
brouck, Peter  Lefevre,  Solomon  Deyo,  Calvin  T.  Haizen,  Hiram  Hasbrouck, 
Jesse  Lyons,  Floyd  S.  McKinstry,  Nathan  Williams,  Abner  Hasbrouck,  Chas. 
W.  Deyo,  John  B.  Deyo,  Edmund  Eltinge,  and  Jonathan  Deyo. 

1871 
FULTON  SAVINGS  BANK 

Chartered  March  29,  1871  (Chap.  206,  L.  1871).  Original  incorporators: 
Sands  N.  Kenyon,  Geo.  M.  Case,  John  Harroon,  John  W.  Pratt,  Willis  S.  Nelson, 
Charles  G.  Bacon,  William  D.  Patterson,  Colvin  Osgood,  Morris  S.  Kimball, 
Willard  Johnson,  Benjamin  J.  Dyer,  Stephen  Pardee,  John  C.  Wells,  Amos 
Dean,  H.  H.  Merriam,  Ira  Canier,  Henry  N.  Somers,  Hiram  Bradway,  William 
Dexter,  Abraham  Howe,  and  James  N.  Townsend. 


APPENDIX  58s 

1871 
PUTNAM  COUNTY  SAVINGS  BANK,  BREWSTER 

Chartered  April  6,  1871  (Chap.  340,  L.  1871).  Original  incorporators:  Augus- 
tus D.  Slasson,  LeRay  Bamum,  Warren  S.  Paddock,  Charles  W.  Budd,  James 
Haviland,  Wm.  F.  Fowler,  Ahaz  S.  Mygatt,  Coleman  K.  Townsend,  Thatcher 
H.  Theall,  Samuel  A.  Townsend,  James  R.  Kelley,  Thomas  Drew,  Odell  Close, 
Lawrence  McKenna,  Joshua  L.  Dean,  Augustus  S.  Dean,  Wm.  T.  Ganung,  Jesse 
Haviland,  Daniel  W.  Dykeman,  George  Hine,  and  Morgan  Horton. 

1871 
SAUGERTIES  SAVINGS  BANK 

Chartered  April  6,  1871  (Chap.  338,  L.  1871).  Original  incorporators:  John 
Kiersted,  Peter  Cantine,  Wm.  F.  Russell,  Joseph  M.  Boies,  Fordyce  L.  Laflin, 
Gaston  Wilbur,  Chauncey  P.  Shultis,  Cyrus  Burbans,  Jeremiah  P.  Russell, 
Joseph  B.  Sheffield,  Wm.  Mulligan,  James  Welch,  Peter  H.  Freligh,  Wm.  M. 
Maginnis,  Egburt  Whittaker,  Benjamin  F.  Freligh,  John  Maxwell,  John  L.  But- 
zell,  John  W.  Davis,  John  C.  Welch,  and  Thomas  S.  Dawes. 

1871 
GOSHEN  SAVINGS  BANK 

Chartered  April  11,  1871  (Chap.  402,  L.  1871).  Original  incorporators:  Ellis 
A.  Post,  Benjamin  F.  Edsall,  George  D.  Willson,  Alfred  B.  Post,  Henry  Merriam, 
Charles  M.  Thompson,  and  Lewis  Cuddeback. 

1871 
HOME  SAVINGS  BANK,  ALBANY 

Incorporated  as  "The  Sixth  Ward  Savings  Bank  of  the  City  of  Albany"  May 
10,  1871  (Chap.  915,  L.  1871),  name  changed  by  Chapter  244,  Laws  of  1872, 
passed  April  16,  1872,  to  the  "Home  Savings  Bank  of  Albany."  Original  incor- 
porators: Wm.  White,  Stephen  O.  Shepard,  Chas.  E.  Leland,  Cornehus  W.  Arm- 
strong, Robt.  H.  Waterman,  Robert  C.  Blackall,  Philip  Ten  Eyck,  J.  Wesley 
Smith,  John  E.  Capron,  John  Bridgeford,  John  W.  Van  Valkenburgh,  Thomas 
L.  Goodwin,  Edmund  L.  Judson,  and  Edward  Coyle. 

1871 
CORNWALL  SAVINGS  BANK 

Chartered  May  10,  1871  (Chap.  914,  L.  1871).  Original  incorporators: 
Stephen  C.  Gillis,  James  K.  Hitchcock,  James  Broadhead,  Stephen  C.  Young, 
E.  Adolph  Matthissen,  Albert  Palmer,  James  G.  Roe,  James  Dunn,  Wm.  T. 
Cocks,  E.  H.  Champlin,  John  Orr,  Thomas  Taft,  Ira  Wood,  C.  H.  Smith,  Thomas 
George,  H.  H.  Salmon,  Noah  T.  Clark,  Wilham  Orr,  W.  I.  Sherwood,  B.  L.  Solo- 
mon, Charles  E.  Cocks,  L.  P.  Ledoux,  Theron  Turner,  and  Josiah  G.  Clark. 

1872 
WALDEN  SAVINGS  BANK 

Chartered  April  25,  1872  (Chap.  366,  L.  1872).  Original  incorporators:  Seth 
M.  Capron,  Wm.  E.  Gowdy,  D.  Wortman  Rapalje,  John  S.  Taylor,  Thomas  J. 
Bradley,  Thomas  Hepper,  Henry  Bergen,  D.  M.  Wade,  Jonathan  Hawkins,  A. 
Deo  Bevier,  Daniel  D.  Dubois,  Wm.  H.  Deganno,  Marcus  K.  Hill,  James  G. 
Terbell,  James  Todd,  George  Weller,  and  John  Tears. 


586  APPENDIX 

1872 
RIVERHEAD  SAVINGS  BANK 

Chartered  April  27, 1872  (Chap.  415,  L.  1872).  Original  incorporators :  James 
H.  Tuthill,  John  Downs,  Nathaniel  W.  Foster,  Jeremiah  M.  Edwards,  Gilbert 
H.  Ketchum,  Daniel  A.  Griffing,  J.  Henr>-  Perkins,  Moses  F.  Benjamin,  Edwin 
F.  Squier,  John  R.  Corwin,  Orville  B.  Ackerly,  Richard  T.  Osborn,  Isaac  C. 
Halsey,  Simeon  S.  Hawkins,  Richard  H.  Benjamin,  John  F.  Foster,  Thomas 
Coles,  J.  Halsey  Yovmg,  John  S.  Marcy,  Abraham  R.  Luce,  and  Jonas  Fishel. 

1872 
COLLEGE  POINT  SAVINGS  BAN^ 

Chartered  May  3,  1872  (Chap.  504,  L.  1872).  Original  incorporators:  Hugo 
Funke,  John  H.  Ranch,  Emil  Greeff,  Herman  C.  Poppenhusen,  Wm.  Pauly, 
Thomas  Daley,  Adolph  Poppenhusen,  Herman  Funke,  G.  Cramer,  A.  D.  Sche- 
singer,  J.  H.  Rehlender,  and  Peter  Buhl. 

1873 
MECHANICS'  SAVINGS  BANK,  COHOES 

Chartered  March  27, 1873  (Chap  i48,L.  1873).  Original  incorporators:  Robert 
Johnston,  Wm.  S.  Smith,  William  Nuttall,  Abner  J.  Griffin,  Edward  N.  Page, 
Samuel  Bilbrough,  P.  R.  Chadwick,  Wm.  Stanton,  John  Clute,  Peter  Dandu- 
rand,  John  Land,  Laban  Vredenberg,  Wm.  E.  Thome,  Jehial  W.  Himes,  Jacob 
Travis,  Norman  W.  Frost,  Alfred  LeRoy,  and  N.  J.  Clute. 

1873 
BUSHWICK  SAVINGS  BANK,  BROOKLYN 

Chartered  June  14,  1873  (Chap.  769,  L.  1873).  Original  incorporators:  Aug- 
ustus A.  Leverich,  Peter  Totans,  Henry  Eckert,  Chas.  W.  Godard,  Joseph  Lieb- 
man,  Jacob  Suydam,  John  Beales,  John  S.  Marshall,  John  H.  Howard,  Samuel 
L.  Carlisle,  Peter  Schamagle,  Peter  Wyckoff,  Adrian  M.  Suydam,  Frederick  W. 
Kalbfleisch,  Frederick  Herr,  John  L.  Nostrand,  Rufus  L.  Scott,  Martin  Ibert, 
John  G.  Jenkins,  Nicholas  Wyckoff,  John  J.  McRum,  Thomas  W.  Field,  and 
Bernard  Midas. 

1874 
ALBANY  COUNTY  SAVINGS  BANK 

Chartered  April  20,  1874  (Chap.  216,  L.  1874).  Original  incorporators:  Jacob 
Leonard,  Benj.  W.  Wooster,  LeGrand  Bancroft,  Theodore  D.  Smith,  Rufus  H. 
King,  Albert  M.  Brumaghim,  James  H.  Pratt,  Royal  Bancroft,  Jasper  Van 
Wormer,  Francis  N.  Sill,  Frederick  Hinckel,  Elair  Taylor,  Thomas  McCarty, 
Cornelius  Smith,  Albert  Wing,  Henry  A.  Fonda,  Willard  Bellows,  Joseph  Mann, 
Alexander  Morris,  and  John  Templeton. 

1874 
KINGSTON  SAVINGS  BANK 

Chartered  April  23, 1874  (Chap.  237,  L.  1874).  Original  incorporators:  Jacob 
B.  Van  Dusen,  Augustus  T.  Newton,  Henry  C.  Connelly,  Robert  Loughran, 
James  Van  Leu ven,  James  Myer,  Jr.,  Wm.  H.  Rameyn,  Geo.  S.  Coutant,  Lucius 
Lawson,  Michael  Hallahan,  Luke  Noone,  Isaac  Bernstein,  Abraham  Van  Vand- 
ling,  John  R.  Freer,  James  S.  Pine,  Chas.  H.  Clearwater,  Frederick  W.  Ingalls, 
Wm.  H.  Fredenbergh,  James  H.  Van  Demark,  Benjamin  Turner,  Jacob  Frei- 
leweh,  and  Augustus  Schoonmaker,  Jr. 


B 

LIST  OF 
SAVINGS  BANKS  IN  THE  STATE  OF  NEW  YORK 

TOGETHER   WITH   THE   OFFICERS   A2^   TRUSTEES 

Arranged  Alphabetically* 

ALBANY  CITY  SAVINGS  INSTITUTION,  ALBANY 

(loo  State  Street;  incorporated  1850) 
John  E.  Walker,  President  William  S,  Hackett,  Treasurer 

TRUSTEES: 
John  E.Walker,  James  W.  Cox,  George  H.  Thacher,  Albert  Hessberg,  Jonas  H. 
Brooks,  Edward  J.  Gallien,  P.  N.  Bouton,  William  S.  Dyer,  John  A.  Delehanty, 
Charles  H.  Sabin,  C.  L.  A.  Whitney,  John  Bowe,  Frederick  W.  Kelley,  William 
T.  Meyer,  Frank  C.  Herrick,  E.  Palmer  Gavit,  Wm.  J.  Nellis,  Horace  S.  Bell. 


ALBANY  COUNTY  SAVINGS  BANK,  ALBANY 

(88  State  Street;  incorporated  1874) 

Seth  Wheeler,  President 

Wm.  N.  S.  Sanders,  Treasurer  Henry  H.  Kohn,  Secretary 

TRUSTEES: 
Albert  V.  Bensen,  William  P.  Rudd,  Geo.  H.  Russell,  Frederic  C.  Curtis,  Seth 
Wheeler,  Wm.  N.  S.  Sanders,  John  R.  Camell,  Andrew  G.  White,  William  Smith, 
John  W.  Emery,  James  B.  Lyon,  Henry  R.  Wright,  Malcolm  S.  Fearey,  James 
Mil  wain,  Wm.  A.  Wheeler,  Chas.  R.  Sutherland,  George  A.  White,  Newton  B. 
Vanderzee,  Richard  Stephens,  Henry  H.  Kohn. 


ALBANY  EXCHANGE  SAVINGS  BANK,  ALBANY 

(450  Broadway;  incorporated  1856) 
Martin  T.  Nachtmann,  President  Joseph  Guardenier,  Treasurer 

TRUSTEES: 
John  E.  McElroy,  John  J.  Gallogly,  Matthew  J.  Wallace,  Jacob  S.  Friedman, 
D.  C.  SUngerland,  Alden  Chester,  Charles  H.  Turner,  John  A.  Becker,  James 
F.  McElroy,  Thomas  E.  Finegan,  M.  T.  Nachtmann,  W.  S.  Van  Derzee,  Lester 
H.  Helmes,  Fred'k  W.  Cameron,  Arthur  T.  Palmer,  James  H.  Mead,  Joseph 
Guardenier,  Walter  S.  McEwan,  Hugh  A.  Arnold,  George  B.  Russell. 


•Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 

587 


588  APPENDIX 

ALBANY  SAVINGS  BANK,  ALBANY 

(20  North  Pearl  Street;  incorporated  1820) 
Marcus  T.  Hxin,  President  Henry  D.  Rodgers,  Treasurer 

TRUSTEES: 
Marcus  T.  Hun,  Grange  Sard,  Ledyard  Cogswell,  Clarence  Rathbone,  Edward 
Bowditch,  Edward  N.  McKinney,  Benjamin  W.  Arnold,  Fred'k  lowTisend, 
James  F.  Tracy,  Fred'k  Tillinghast,  Gerrit  Y.  Lansing,  Wm.  V.  R.  Erving,  T.  I. 
Van  Antwerp,  Henry  M.  Sage,  Luther  H.  Tucker,  Robert  C.  Pruyn,  Oscar  L. 
Hascy. 

AMERICAN  SAVINGS  BANK  OF  BUFFALO,  BUFFALO 

(215  Main  Street;  incorporated  1907) 
Herbert  A.  Meldrum,  President  William  P.  Luedeke,  Secretary 

TRUSTEES: 
Frank  X.  Argus,  Chas.  Antoniazzi,  William  T.  Atwater,  George  K.  Birge, 
Alfred  H.  Burt,  Myron  P.  Bush,  Edward  H.  Butler,  Charles  J.  Fix,  F.  E.  Fron- 
czak,  L.  p.  Fuhrmann,  James  Hanrahan,  Robert  H.  Heussler,  Wm.  H.  Hotch- 
kiss,  Dudley  M.  Irwin,  Bert  L.  Jones,  Wm.  P.  Luedeke,  Norman  E.  Mack, 
George  A.  Ray,  J.  M.  Satterfield,  Thomas  Stoddart,  James  Sweeney,  Jr.,  George 
R.  Teller,  Chas.  W.  Toynbee,  H.  A.  Meldrum,  G.  M.  Zimmerman,  J.  M.  Wal- 
lenmeier,  Jr. 

AMERICAN  SAVINGS  BANK,  NEW  YORK   CITY 

(lis  West  42nd  Street;  incorporated  1882) 

John  V.  Irwin,  President  William  M.  Hazelton,  Treasurer 

TRUSTEES: 
Vincent  Pisek,  James  F.  Fargo,  L.  Duncan  Bulkley,  John  V.  Irwin,  Wm.  M, 
Campbell,  David  Orr,  William  C.  Story,  Henry  R.  Sutphen,  Edmond  E.  Robert, 
Fred.  Mathesius,  Jr.,  Henry  B.  Britton,  Fred.  M.  Johnson,  Warren  Thorpe, 
Chas.  O.  Kimball,  Carl  L.  Victor,  Hicks  A.  Weatherbee,  John  R.  Christie, 
Michael  I.  Pupin. 

AMSTERDAM  SAVINGS  BANK,  AMSTERDAM 

(11  Division  Street;  incorporated  1886) 
S.  H.  French,  President  Charles  E.  French,  Treasurer 

TRUSTEES: 
S.  H.  French,  Bernard  Machold,  Thomas  Morphy,  Thomas  Mansfield,  Seely 
Conover,  W.  Barlow  Dunlap,  John  Kavanaugh,  James  T.  Sugden,  C.  Van  Buren, 
Charles  E.  French,  William  J.  KUne,  Nathan  B.  Smith,  Robert  J.  Lindsey, 
Samuel  Wallin,  W.  C.  Schaufler. 

AUBURN  SAVINGS  BANK,  AUBURN 

(74  Genesee  Street;  incorporated  1849) 
David  M.  Dunning,  President  William  S.  Downer,  Treasurer 

TRUSTEES: 
Edwin  R.  Fay,  David  M.  Dunning,  George  Underwood,  Nelson  B.  Eldred, 
George  H.  Nye,  William  I*'.  Keeler,  Henry  D.  Titus,  Hobart  L.  Romig,  William 
H.  Seward,  Jr.,  Henry  D.  Noble,  Frederick  Sefton,  William  S.  Downer,  Samuel 
V.  Kennedy. 


APPENDIX  589 

BANK  FOR  SAVINGS  IN  THE  CITY  OF  NEW  YORK 

(280  Fourth  Avenue;  incorporated  1819) 
Walter  Trimble,  President  James  Knowles,  Comptroller 

TRUSTEES: 
Walter  Trimble,  Frederic  W.  Stevens,  Charles  S.  Brown,  Adrian  Iselin,  Jr., 
Lewis  B.  Gawtry,  John  E.  Parsons,  Chas.  A.  Sherman,  Henry  W.  de  Forest, 
W.  Irving  Clark,  WilUam  J.  Riker,  Wm.  W.  Appleton,  Charles  A.  Peabody, 
Thomas  Dimond,  Robert  Bacon,  Henry  R.  Hoyt,  August  Behnont,  Charles  H. 
Tweed,  William  Sloane,  James  Knowles,  Thomas  Denny,  Pierre  Jay,  John  E. 
Cowdin,  James  S.  Alexander,  Nicholas  Biddle,  George  F.  Baker,  Jr.,  Otto  M. 
Eidlitz. 

BANK  FOR  SAVINGS  OF  OSSINING,  OSSINING 

(Highland  Avenue  and  Main  Street;  incorporated  1854) 

Stephen  M.  Sherwood,  President  Seth  G.  Ellegood,  Secretary 

TRUSTEES: 
S.  M.  Sherwood,  C.  Townsend  Young,  Theodore  H.  Calam,  Seth  G.  Ellegood, 
Wilbur  F.  Foshay,  Warren  A.  Miner,  George  Hyatt,  Dudley  B.  Holbrook,  Jacob 
Chadeayne,  Leonard  A.  Ballard,  G.  S.  Hilliker,  Louis  F.  Washbume,  Edwin  L. 
Todd. 

*BAY  RIDGE  SAVINGS  BANK,  BROOKLYN 
(5517  Fifth  Avenue;  incorporated  1909) 
Maurice  T.  Lewis,  President  Thomas  L.  Dowling,  Jr.,  Cashier 

TRUSTEES: 
Maurice  T.  Lewis,  Alfred  Hamilton,  Michael  Murphy,  John  D.  Holsten, 
Gustave  Grafenstein,  Pierce  Keefe,  George  Ihnken,  Justus  Berge,  Henry  Meyer, 
Henry  Schwanewede,  Wm.  E.  Kays,  Peter  N.  Meinke,  Henry  Kettelhodt,  Wil- 
liam J.  Bolger,  Olaf  Olafson,  Simon  Henchel. 

BINGHAMTON  SAVINGS  BANK,  BINGHAMTON 

(97  and  99  Collier  Street;  incorporated  1867) 
Charles  W.  Gennet,  President  Asbury  C.  Deyo,  Treasurer 

TRUSTEES: 
John  G.  Orton,  Edward  C.  Smith,  Edward  P.  McKinney,  George  M.  Harris, 
Charles  F.  Sisson,  Charles  W.  Gennet,  Charles  M.  Stone,  S.  J.  Hirschmann,  John 
Bayless,  Charles  A.  Weed,  George  F.  Lyon,  William  H.  Ogden,  Asbury  C.  Deyo. 

BOWERY  SAVINGS  BANK,  NEW  YORK  CITY 

(128  and  130  Bowery;  incorporated  1834) 
Henry  A.  Schenck,  President  Joseph  G.  Liddle,  Secretary 

TRUSTEES: 
Henry  A.  Schenck,  Wm.  M.  Spackman,  Wm.  A.  Nash,  John  J.  Sinclair,  David 
S.  Taber,  Geo.  H.  Robinson,  George  Jeremiah,  Henry  C.  Berlin,  Charles  E. 
Bigelow,  John  C.  Moore,  William  C.  Wood,  I.  W.  Drummond,  H.  B.  Dominick, 
C.  L.  Perkins,  Robert  M.  Gallaway,  C.  H.  Hackett,  Robt.  B.  Woodward,  John 
W.  Aitken,  Mark  W.  Maclay,  Ed.  D.  Faulkner,  Thomas  B.  Kent,  Francis  S. 
Bangs,  James  Stillman,  Seth  M.  Milliken,  Richard  M.  Hoe,  George  McNeir, 
Charles  H.  Tenney,  Hobart  J.  Park,  W.  Hull  Wickham,  Stephen  Baker,  Arthur 
L.  Lesher,  S.  W.  Fairchild. 


*Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


590  APPENDIX 

BREVOORT  SAVINGS  BANK,  BROOKLYN 

(522  Nostrand  Avenue;  incorporated  1890) 
Howard  M.  Smith,  President  Raymond  Lounsbery,  Secretary 

TRUSTEES: 
Chas.  M.  x'\ikman,  Joseph  M.  Bacon,  John  W.  Bailey,  Charles  Cooper,  Wil- 
liam J.  Gilpin,  William  H.  Good,  William  H.  Harding,  G.  W.  Harman,  Walter 
C.  Humstone,  Alfred  T.  Seward,  R.  Lounsbery,  Edward  Lyons,  John  McNamee, 
Ernst  Nathan,  George  W.  Pipe,  James  R.  Ross,  Howard  M.  Smith,  Bertrand  L. 
Smith,  John  D.  Sullivan,  Thos.  J.  Washburn,  L.  A.  Wray,  Patrick  M.  Wood, 
John  H.  Burroughs,  Ernest  H.  Pilsbury. 

BROADWAY  SAVINGS  INSTITUTION,  NEW  YORK  CITY 

(5  and  7  Park  Place;  incorporated  1851) 
Horace  F.  Hutchison,  President  William  H.  Rose,  Secretary 

TRUSTEES: 
J.  A.  Geissenhainer,  H.  F.' Hutchinson,  W.  A.  Conover,  Eugene  Britton,  H. 
Mortimer  Brush,  Oscar  T.  Mackey,  W.  L.  Wellington,  Richard  B.  Kelly,  Remsen 
Johnson,  Edward  Townsend,  James  Wotherspoon,  Frederick  W.  Hunter,  Charles 

A.  Frank,  Samuel  S.  Blood,  J.  Seaver  Page,  Henry  A.  Howarth,  William  H. 
Rose. 

BRONX  SAVINGS  BANK,  NEW  YORK  CITY 

(429  Tremont  Avenue;  incorporated  1906) 
William  B.  Aitken,  President  William  E.  Stevens,  Treasurer 

TRUSTEES: 
William  B.  Aitken,  F.  Brevoort  AUin,  Charles  H.  Bull,  Clifton  B.  Bull,  Wm.  I. 
Brown,  Nelson  F.  Grififin,  John  F.  Holmes,  Chas.  F.  Schumann,  William  E. 
Stevens,  Albert  E.  Colfax,  John  S.  Sutphen,  J.  Ostram  Taylor,  Livingston  Wet- 
more,  T.  Tasso  Fischer,  Walter  S.  Wilson,  Thos.  Le  Boutillier,  Thos.  A.  Nos- 
worthy. 

BROOKLYN  SAVINGS  BANK,  BROOKLYN 

(141  Pierrepont  Street;  incorporated  1827) 
Crowell  Hadden,  President  A.  C.  Hare,  Cashier 

TRUSTEES: 
Crowell  Hadden,  Richard  L.  Edwards,  Edw.  H.  Litchfield,  Frank  Lyman, 
David  G.  Legget,  Willis  L.  Ogden,  John  F.  Halsted,  Jonathan  Bulkley,  Frank  L. 
Babbott,  Henry  F.  Noyes,  Sanford  H.  Steele,  Daniel  J.  Creem,  CHnton  R.  James, 

B.  Herbert  Smith,  Francis  L.  Noble,  F.  A.  M.  Burrell,  Edwin  P.  Maynard, 
WiUiam  L.  Moffat,  Harold  I.  Pratt,  Charles  J.  Peabody,  Martin  Joost,  Albert  L. 
Mason,  Frank  D.  Tuttle,  William  Mason,  Charles  L.  Morse. 

♦BUFFALO  SAVINGS  BANK,  BUFFALO 

(545  Main  Street;  incorporated  1846) 
Spencer  Clinton,  President  Edward  G.  Becker,  Secretary 

TRUSTEES: 
Spencer  Clinton,  E.  C.  Townsend,  Chas.  L.  Gurney,  Edward  G.  Becker,  W. 
H.  Glenny,  George  Bleistein,  Seymour  P.  White,  John  L.  Clawson,  C.  B.  Porter, 
De  Witt  Clinton,  Henry  M.  Gerrans,  Richard  E.  Gavin,  John  B.  Olmstead. 


Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


APPENDIX  591 

BUSHWICK  SAVINGS  BANK,  BROOKLYN 

(726  Grand  Street;  incorporated  1873) 
Jere  E.  Brown,  President  George  J.  Merked,  Cashier 

TRUSTEES: 
Rufus  L.  Scott,  Daniel  Canty,  Edward  Bush,  Henry  Schade,  John  H.  Scheidt, 
William  S.  Wandel,  William  G.  Miller,  Augustus  P.  Avery,  Jere  E.  Brown,  John 
H.  Vanderveer,  M.  L.  Reynolds,  F.  H.  Narwood,  Louis  G.  Burger,  George  W. 
Schaedle,  Andrew  F.  Wilson,  Peter  E.  Nostrand,  M.  Fackenthal,  Herrman  C. 
Huelle,  Theophile  Thonet,  Christian  D.  Homeyer,  Charles  Trietschler,  David  H. 
Moore. 

CATSKILL  SAVINGS  BANK,  CATSKILL 

(343  Main  Street;  incorporated  1868) 
W.  Irving  Jennings,  President  Jeremiah  Day,  Secretary 

TRUSTEES: 
W.  I.  Jennings,  Jeremiah  Day,  Orrin  Day,  Wm.  Palmatier,  Charles  E.  Bassett, 
Emory  A.  Chase,  C.  E.  Bloodgood,  A.  C.  Bloodgood,  Lucius  R.  Doty,  Addison 
P.  Jones,  Wm.  H.  Van  Orden,  George  S.  Lewis,  Frank  H.  Osbom,  Omar  V.  Sage, 
William  J.  Hughes. 

CAYUGA  COUNTY  SAVINGS  BANK,  AUBURN 

(113  and  115  Genesee  Street;  incorporated  1864) 
William  F.  Wait,  President  William  H.  Meaker,  Treasurer 

TRUSTEES: 
William  H.  Seward,  Benjamin  B.  Snow,  William  H.  Meaker,  James  Lyon, 
Chas.  A.  McCarthy,  William  F.  Wait,  David  Wadsworth,  Jr.,  Edwin  D.  Metcalf, 
George  B.  Turner,  Sidney  J.  Westfall,  C.  F.  Baldwin,  Charles  W.  Brister,  G.  V. 
Loughborough,  Hull  Greenfield,  William  W.  Eccles,  Charles  P.  Mosher,  Daniel 
L.  Ramsey. 

♦CHENANGO  VALLEY  SAVINGS  BANK,  BINGHAMTON 

(2  Chenango  Street;  incorporated  1867) 
George  A.  Kent,  President  William  R.  Ely,  Treasurer 

TRUSTEES: 
Arthur  S.  Bartlett,  George  A.  Kent,  C.  F.  Hotchkiss,  William  W.  Sisson, 
James  W.  Manier,  Robert  S.  Parsons,  George  F.  O'Neil,  WiUiam  G.  Phelps, 
Leslie  M.  Wilson,  William  R.  Ely,  Renna  Z.  Spaulding,  Arthur  L.  Kent,  Harry 
Rubin. 

CITIZENS'  SAVINGS  BANK,  NEW  YORK  CITY 

(56  and  58  Bowery;  incorporated  i860) 
Henry  Hasler,  President  Henry  Sayler,  Secretary 

TRUSTEES: 
Chas.  H.  Steinway,  Henry  Hasler,  Charles  Gulden,  Percival  Kuhne,  James 
Rowland,  Arthur  W.  Watson,  John  C.  Juhring,  John  N.  Fuchs,  David  C.  Town- 
send,  Frederick  W.  Wurster,  Charles  H.  Smith,  John  A.  Beall,  Charles  H.  Clark, 
Edward  H.  Titus,  Barak  G.  Coles,  Jr.,  Richard  A.  Bachia,  Julius  De  Long,  John 
L.  Dudley,  Henry  Sayler,  Warren  D.  Orvis,  William  H.  Schmidt. 

*Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


592  APPENDIX 

CITY  SAVINGS  BANK  OF  BROOKLYN,  BROOKLYN 

(Comer  Lafayette  and  Flatbush  avenues;  incorporated  1886) 
Remsen  Rushmore,  President  William  A.  Avis,  Treasurer 

TRUSTEES: 
Francis  O.  Afield,  William  A.  Avis,  David  F.  Butcher,  Jacob  G.  Dettmer, 
Simon  J.  Harding,  James  Matthews,  Theophilus  Olena,  Lewis  H.  Pounds,  Rem- 
sen Rushmore,  John  M.  Rider,  H.  V.  Raymond,  J.  B.  Summerfield,  Frederick  H. 
Webster,  Edwin  H.  Sayre,  Rufus  T.  Griggs,  James  G.  Shaw,  Clarence  T.  Corey, 
Frank  C.  Swan,  Ralph  E.  Dayton,  Barthol'w  A.  Greene. 


COHOES  SAVINGS  INSTITUTION,  COHOES 

(65  Remsen  Street;  incorporated  1851) 
George  H.  McDowell,  President  Charles  R.  Ford,  Treasurer 

TRUSTEES: 
Henry  A.  Strong,  Geo.  H.  McDowell,  James  W.  Ablett,  George  R.  Wilsdon, 
George  A.  Harper,  John  W.-  Kline,  James  Aitken,  John  Laughlin,  Merritt  D. 
Hanson,  William  D.  Boswell,  Charles  R.  Ford,  Isaiah  Fellows,  John  F.  Scott, 
James  S.  Calkins,  John  F.  McGarrahan,  Charles  L.  Mitchell,  WiUiam  J.  Elhott, 
Napoleon  Favreau. 

COLLEGE  POINT  SAVINGS  BANK,  COLLEGE  POINT 

(254  Second  Avenue;  incorporated  1872) 
Fred.  W.  Grell,  President  Geo.  W.  Gillette,  Secretary 

TRUSTEES: 
Ferdinand  Martens,  Wm.  W.  Weitling,  A.  H.  Schlesinger,  George  W.  Gillette, 
Frank  Hunold,  Fred.  W.  Grell,  Edwin  P.  Roe,  William  F.  Buhl,  Henry  Bohne, 
George  Duer,  Wilham  Schmidt,  G.  A.  S.  Wieners,  H.  C.  Poppenhusen. 

COMMONWEALTH  SAVINGS  BANK  OF  NEW  YORK  CITY 

(2007  Amsterdam  Avenue;  incorporated  1910) 
John  H.  Boschen,  Presidetit  Charles  S.  G.\ubert,  Secretary 

TRUSTEES: 
Herman  W.  Beyer,  John  H.  Boschen,  John  F.  Cowan,  John  R.  Davies,  Frank 

B.  French,  Murtha  J.  Garry,  Charles  S.  Gaubert,  Valentine  J.  Hahn,  Philip 
Hano,  Henry  O.  Heuer,  Cornelius  Huth,  George  H.  Hyde,  Thomas  F.  McAvoy, 
John  A.  Murray,  Christian  Schierloh,  Wm.  F.  Schneider,  Richard  H.  Smith, 
Louis  K.  Ungrich,  Martin  Wallace,  Burton  J.  Wilke,  William  S.  Bennet,  Otto  H. 
Schlobohm,  Frank  P.  Schimpf,  Gustav  Scholer,  Donald  G.  Sinclair. 

♦CORNWALL  SAVINGS  BANK,  CORNWALL-ON-THE-HUDSON 

(Incorporated  1871) 
TowNSEND  D.  Wood,  President  Gilbert  T.  Cocks,  Treasurer 

TRUSTEES: 
William  Brewster,  Patrick  Bevans,  Henry  N.  Clark,  Rowland  Cocks,  Charles 

C.  Cocks,  Gilbert  T.  Cocks,  Harvey  A.  Call,  L.  Grant  Goodnough,  Frank  Vickere, 
Townsend  D.  Wood,  Stephen  B.  Young,  George  B.  Mailler,  Edward  L.  Sylcox. 


*Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


APPENDIX  593 

CORTLAND  SAVINGS  BANK,  CORTLAND 

(hi  Main  Street;  incorporated  1866) 
Calvin  P.  Walrad,  President  Benjamin  L.  Webb,  Treasurer 

TRUSTEES: 
Calvin  P.  Walrad,  Benjamin  L.  Webb,  Marcus  H.  McGraw,  Lewis  Bouton, 
Hubert  T.  Bushnell,  Peter  D.  Muller,  Stratton  S.  Knox,  Lester  P.  Bennett, 
Grove  T,  Maxon,  Arthur  F.  Stilson,  William  J.  Buchanan,  Byron  Maxson,  Wm. 
A.  Stockwell. 

DIME  SAVINGS  BANK  OF  BROOKXYN,  BROOKLYN 

(9  De  Kalb  Avenue;  incorporated  1859) 
J.  Lawrence  Marcellus,  President  Russell  S.  Walker,  Treasurer 

TRUSTEES: 
J.  L.  Marcellus,  John  Truslow,  Geo.  W.  Chauncey,  Samuel  Rowland,  R.  W. 
Bainbridge,  Horace  C.  Du  Val,  Ludwig  Nissen,  Wm.  McCarroll,  N.  T.  Thayer, 
J.  T.  E.  Litchfield,  Russell  S.  Walker,  George  Cox,  Charles  E.  Teale,  Geo.  T. 
Moon,  Frank  H.  Parsons,  Frederic  B.  Fiske,  James  L.  Brumley,  Edward  B. 
Jordan,  Frederick  W.  Rowe,  Frederick  W.  Jackson. 

DIME  SAVINGS  BANK  OF  WILLIAMSBURGH,  BROOKLYN 

(Corner  Havemeyer  and  South  Fifth  streets;  incorporated  1864) 
W.  P.  Sturgis,  President  C.  M.  Lowes,  Treasurer 

TRUSTEES: 
Jacob  F.  Healey,  William  P.  Sturgis,  Robert  B.  Ferguson,  Augustus  Wenzel, 
Frederick  V.  Dare,  H.  F.  Mollenhauer,  John  McKee,  Otto  F.  Struse,  Alex.  D. 
Seymour,  Warren  F.  Goodwin,  James  A.  Sperry,  John  Hoerle,  Alvah  Miller, 
H.  R.  Ferguson,  C.  C.  Mollenhauer. 

DOLLAR  SAVINGS  BANK,  NEW  YORK  CITY 

(2808  Third  Avenue;  incorporated  1890) 
George  E.  Edwards,  President  William  M.  Kern,  Treasurer 

TRUSTEES: 
George  E.  Edwards,  Brian  G.  Hughes,  William  M.  Kern,  James  M.  La  Coste, 
Bernard  French,  J.  Harris  Jones,  John  S.  Hanson,  Geo.  M.  MacKellar,  Charles  W. 
Bogart,  James  S.  Bryant,William  S.  Beckley,  Howell T.  Manson,  Charles  P.  Faber. 

DRY  DOCK  SAVINGS  INSTITUTION,  NEW  YORK  CITY 

(341  Bowery;  incorporated  1848) 
Andrew  Mills,  President  William  F.  Patterson,  Treasurer 

TRUSTEES: 
David  J.  Taff,  Andrew  Mills,  Frederick  Zittel,  John  A.  Tackaberry,  William 
S.  Gray,  Benj.  DeF.  Curtiss,W.  M.  Bennet,  Walter  E.  Frew,Wm.  H.  Remick, 
Wm.  F.  Patterson,  Samuel  E.  Slaymaker,  Augustus  H.  Teunis,  George  B.  Hodg- 
man,  Richard  T.  Davies. 

EAST  BROOKLYN  SAVINGS  BANK,  BROOKLYN 

(643  Myrtle  Avenue;  incorporated  i860) 
Eugene  F.  Barnes,  President  David  Morehouse,  Treasurer 

TRUSTEES: 
Charles  A.  Peck,  Eugene  F.  Barnes,  John  H.  Ireland,  James  N.  Brown,  John 
H.  Rowland,  Henry  Von  Glahn,  John  T.  Barry,  Marvin  Robbins,  Robert  L. 
Wensley,  E.  J.  Phillips,  Frederick  E.  Gunnison,  A.  R.  Boerum,  Chnton  P.  Case, 
Harry  A.  Moody,  William  A.  Graham,  Alfred  S.  Hughes,  George  Nicholson. 


594 


APPENDIX 


♦EASTCHESTER  SAVINGS  BANK,  MOUNT  VERNON 

(g  South  Third  Avenue;  incorporated  187 1) 
George  H.  Brown,  President  Oliver  A.  Westfall,  Secretary 

TRUSTEES: 
J.  Mortimer  Bell,  Samuel  W.  Bertine,  George  H.  Brown,  A.  M.  Campbell, 
Franklin  T.  Davis,  Minot  C.  Kellogg,  J.  Milford  McKee,  Jonah  Rockett,  James 
S.  Van  Court,  Oliver  A.  Westfall,  Marx  Wintjen,  Charles  Rockwell,  Theodore 
Taylor. 

EAST  NEW  YORK  SAVINGS  BANK,  BROOKLYN 

(2644  Atlantic  Avenue;  incorporated  1868) 
Frederick  Middendorf,  President  John  M.  Linz,  Treasurer 

TRUSTEES: 
Frederick  Middendorf,  C.  W.  Colyer,  Rudolph  Reimer,  Frank  C.  Lang,  David 
Hopkins,  Frederick  D.  Hart,  Louis  A.  Tranberg,  Clarence  F.  Colyer,  John  M. 
Linz,  Adolph  Kiendl,  Rudolph  C.  Werner,  Carl  E.  Anselm,  A.  H.  Ackerman, 
Edward  A.  Richards,  Henry  Meyer. 


EASTERN  DISTRICT  SAVINGS  BANK  OF  THE  CITY  OF 
BROOKLYN 

(1024-1026  Gates  Avenue;  incorporated  1895) 
Lewis  E.  Meeker,  President  A.  Manning  Shevill,  Cashier 

TRUSTEES: 
J.  Parker  Sloane,  Charles  L.  Sicard,  John  W.  Fraser,  Geo.  W.  Paynter,  Henry 
L.  Gaus,  Henry  Vollweiler,  Homer  L.  Bartlett,  C.  Jerome  Edwards,  John  Moore, 
Fred  E.  Brandis,  John  Bossert,  Lewis  E.  Meeker,  Charles  Jacob. 


EAST  RIVER  SAVINGS  INSTITUTION,  NEW  YORK  CITY 

(291-295  Broadway;  incorporated  1848) 
Dick  S.  Ramsay,  President  Charles  A.  Whitney,  Secretary 

TRUSTEES: 
Henry  T.  Nichols,  George  Abeel,  Dick  S.  Ramsay,  Warren  C.  Barber,  Richard 
Young,  J.  Worrall  Arthur,  William  C.  Smith,  Daniel  W.  Whitmore,  Chas.  A. 
O'Donohue,  Charles  F.  Bassett,  William  C.  Taber,  Julian  D.  Fairchild,  William 
Coverly,  William  H.  Taylor,  James  B.  Clews,  J.  Fred.  Pierson,  Julian  P.  Fair- 
child,  Richard  Young,  Jr.,  Darwin  R.  James,  Jr.,  James  A.  Smith,  Charles  E. 
Perkins. 

EAST  SIDE  SAVINGS  BANK  OF  ROCHESTER,  ROCHESTER 

(233  Main  Street,  E.;  incorporated  1869) 
Benjamin  E.  Chase,  President  Burton  H.  Davy,  Secretary 

TRUSTEES: 
Cassius  C.  Davy,  Benjamin  E.  Chase,  W.  Henry  Mathews,  William  R.  Peters, 
Alex.  B.  Lamberton,  Austin  C.  Jackson,  William  Bausch,  Frank  A.  Brownell, 
Burton  H.  Davy,  Charles  A.  Green,  William  H.  Dunn,  Arthur  T.  Hagen,  V.  F. 
Whitmore,  John  H.  Engert,  Chas.  H.  Ocumpaugh. 


Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


APPENDIX  595 

ELLENVILLE  SAVINGS  BANK,  ELLENVILLE 

(io8  Canal  Street;  incorporated  1869) 
DwiGHT  Divine,  President  John  A.  Tice,  Secretary 

TRUSTEES: 
Dwight  Divine,  Geo.  H.  Dutcher,  William  H.  Deyo,  James  B.  Smith,  J.  C. 
Young,  Isaac  N.  Cox,  Henry  F.  Hoornbeek,  Webster  Wilkinson,  Gilbert  Du 
Bois,  U.  E.  Terwilliger,  R.  Dwight  Clark,  William  C.  Rose,  C.  D.  Divine,  George 
B.  Holmes,  Phillip  Patterson,  Cornelius  H.  Sheely,  William  A.  Hoar,  Garret  Le 
Roy. 

ELMIRA  SAVINGS  BANK,  ELMIRA 

(212  East  Water  Street;  incorporated  1869) 
Jesse  L.  Cooley,  President  M.  A.  Leahy,  Secretary 

TRUSTEES: 

Irving  D.  Booth,  Jesse  L.  Cooley,  John  J.  Curtis,  Henry  J.  Haase,  Fred.  D. 

Herrick,  John  W.  Huston,  Michael  A.  Leahy,  Wm.  H.  Ferguson,  Louis  N. 

Mathews,  Henry  Simpson,  William  M.  Ufford,  Alexander  S.  Diven,  H.  C.  Man- 

deville. 

EMIGRANT  INDUSTRIAL  SAVINGS  BANK,  NEW  YORK  CITY 

(51  Chambers  Street;  incorporated  1850) 

Thomas  M.  Mulry,  President  John  J.  Pulleyn,  Comptroller 

TRUSTEES: 
L.  V.  O'Donohue,  C.  V.  Fomes,  James  G.  Johnson,  Herman  Ridder,  Myles 
Tierney,  M.  J.  Drummond,  Joseph  P.  Grace,  Thos.  M.  Mulry,  M.  F.  McDer- 
mott,  James  Clarke,  Frank  S.  Gannon,  John  J.  Pulleyn,  Henry  Heide,  William 
Harkness,  John  J.  Deery,  Samuel  Adams,  John  D.  Ryan,  F.  F.  Fitzpatrick,  John 
G.  O'Keeffe. 

EMPIRE  CITY  SAVINGS  BANK,  NEW  YORK  CITY 

(231  West  125th  Street;  incorporated  1889) 
John  Beaver,  President  A.  S.  Van  Winkle,  Secretary 

TRUSTEES: 
William  Moores,  John  H.  Loos,  B.  G.  Mitchell,  John  Beaver,  Arthur  E.  Wood, 
E.  H.  Hamilton,  William  T.  Koch,  J.  C.  Watson,  John  Bottomley,  Geo.  H. 
Taylor,  Edward  L.  Young,  Richard  E.  Cochran,  Lyman  T.  Dyer,  Chas.  W. 
Dayton,  Albert  E.  Merrall. 

ERIE  COUNTY  SAVINGS  BANK,  BUFFALO 

(Niagara  and  Main  streets;  incorporated  1854) 
RoBT.  S.  Donaldson,  President  Robert  D.  Young,  Secretary 

TRUSTEES: 
Robt.  S.  Donaldson,  George  L.  Williams,  William  A.  Rogers,  G.  Barrett  Rich, 
George  R.  Howard,  L.  D.  Rumsey,  Carlton  M.  Smith,  Thos.  T.  Ramsdell,  John 
W.  Robinson,  H.  W.  Sprague,  Whitney  G.  Case,  Robert  D.  Young,  George  C. 
Ginther,  Seymour  H.  Knox,  John  K.  Walker. 

EXCELSIOR  SAVINGS  BANK,  NEW  YORK  CITY 

(79  West  Twenty- third  Street;  incorporated  1869) 
William  J.  Roome,  President  John  C.  Griswold,  Secretary 

TRUSTEES: 
John  C.  Gulick,  Robert  C.  Brown,  Henry  Dazian,  William  H.  Barron,  William 
J.  Roome,  Henry  D.  Brewster,  John  Burke,  Robert  J.  Horner,  William  Craw- 
ford, Rich  G.  HoUaman,  Patrick  F.  Giffin,   Ephraim  M.  Youmans,  Benj.  A. 
Hegeman,  Jr.,  Clarence  Price,  Michael  Coleman. 


596  APPENDIX 

*  FARMERS*  AND  MECHANICS'  SAVINGS  BANK  OF   THE  CITY 
OF  LOCKPORT 

(ii6  Main  Street;  incorporated  1870) 
Wm.  a.  Williams,  President  J.  E.  Emerson,  Secretary 

TRUSTEES: 
Wm.  A.  Williams,  Charles  A.  Hoag,  Joseph  Dumville,  Jerome  E.  Emerson, 
George  H.  Moody,  John  T.  Damson,  Wm.  Richmond,  H.  J.  Babcock,  Thos.  M. 
McGrath,  M.  D.  Clapsattle,  John  B.  Arnold,  E.  M.  Grigg,  I.  A.  Bronson. 

♦FISHKILL  SAVINGS  INSTITUTE,  FISHKILL 

(Main  Street;  incorporated  1857) 
Franklin  R.  Benjamin,  President  Chas.  R.  Montfort,  Treasurer 

TRUSTEES: 
F.  R.  Benjamin,  J.  S.  Luyster,  Alex.  H.  Dudley,  Chas.  D.  Sherwood,  Chas.  R. 
Montfort,^ Robert  W.  Doughty,  Hyman  B.  Rosa,  James  E.  Dean,  S.  L.  Van  Voor- 
his,  Lewis  E.  Wood,  Jarvis  S.  Phillips,  Cyrus  Tompkins,  John  Rapelje,  E.  H. 
Foshay,  S.  H.  Parsons,  Wm.  H.  Haight,  James  Adriance,  J.  B.  Waldo. 

FRANKLIN  SAVINGS  BANK,  NEW  YORK  CITY 

(656  Eighth  Avenue;  incorporated  i860) 
WnxiAM  G.  CoNKLiN,  President  James  A.  Stenhouse,  Secretary 

TRUSTEES: 
John  D.  Robinson,  John  S.  Sills,  Wm.  H.  Van  Kleeck,  Bernard  Karsch,  James 
G.  Cannon,  J.  Edgar  Leaycraft,  William  G.  Conklin,  Wilson  M.  Powell,  Jr., 
Howard  C.  Smith,  Jr.,  Charles  A.  Walker,  William  H.  Porter,  Stuart  Duncan, 
Gardner  Wetherbee,  Wm.  C.  Muschenheim,  T.  Frank  Manville,  John  I. 
Downey,  Simeon  Ford. 

FULTON  SAVINGS  BANK,  FULTON 

(75  South  First  Street;  incorporated  1871) 
Arvtn  Rice,  President  William  J.  Love  joy,  Treasurer 

TRUSTEES: 

Arvin  Rice,  Giles  S.  Piper,  William  J.  Lovejoy,  George  P.  Wells,  H.  Putnam 

Allen,  Cameron  C.  Benedict,  Edwin  F.  Palmer,  Arthur  G.  Gilbert,  Harry  L. 

Stout,  Watson  A.  Butts,  Elmer  E.  Morrill,  George  E.  True,  Herbert  J.  Wilson, 

George  G.  Chauncey,  Albert  I.  Morton,  Frank  W.  Lasher,  John  R.  Sullivan. 


GENEVA  SAVINGS  BANK,  GENEVA 

(31  Seneca  Street;  incorporated  1910) 
James  E.  Brown,  President  George  D.  Whedon,  Treasurer 

TRUSTEES: 
Alexander  D.  Allen,  James  E.  Brown,  WilUam  G.  Dove,  Frederick  M.  Fast, 
John  C.  Fitzwater,  Lansing  G.  Hoskins,  Whitman  H.  Jordan,  Alfred  G.  Lewis, 
George  F.  Licht,  Patrick  O'Malley,  Samuel  D.  Pierson,  Arthur  P.  Rose,  H.  H. 
Schieffelin,  Theodore  J.  Smith,  Edwin  S.  Thome,  D.  J.  Van  Auken,  Henry  A. 
Wheat,  George  D.  Whedon,  George  H.  Whitwell,  Thomas  B.  Wilson. 


'Those  marked  with  asterisk,  not  members  of  the  Savings  Banks  .\ssociation  of  the  State  of 
New  York. 


APPENDIX  597 

GERMAN  SAVINGS  BANK  OF  BROOKLYN,  BROOKLYN 

(531  Broadway;  incorporated  1866) 
Charles  Froeb,  Vice-President  Henry  Stximpf,  Cashier 

TRUSTEES: 
John  L.  Gaus,  Theo.  Engelhardt,  J.  A.  Mollenhauer,  Charles  Froeb,  A.  C. 
Scharmann,  Henry  C.  Deck,  J.  Henry  Dick,  John  R.  Thompson,  George  B. 
Goodwin,  J.  H.  Schumann,  Jr.,  Henry  Stumpf,  Joseph  Huber,  J.  M.  Otto. 

GERMAN  SAVINGS  BANK  IN  THE  CITY  OF  NEW  YORK 

(157  Fourth  Avenue;  incorporated  1859) 
Alfred  Roelker,  President  Adolph  Koppel,  Treasurer 

TRUSTEES: 
Alfred  Roelker,  Dallas  B.  Pratt,  James  Speyer,  Edw.  C.  Schaefer,  R.  Sieden- 
burg,  Fritz  Achehs,  D.  Schnakenberg,  G.  C.  Clark,  Jr.,  Fred.  T.  Steinway, 
Thomas  F.  Vietor,  George  S.  Runk,  Ernest  Steiger,  Carl  Goepel,  O.  F.  ZoUikoffer, 
Adolf  Kuttroff,  Hubert  Cillis,  August  Zinsser,  A.  Pagenstecher,  William  Schall, 
F.  T.  Fleitmann,  Rudolph  Keppler,  Joseph  F.  Stillman,  Ernst  Pfarrius,  Rudolf 
Erbsloh. 

GERMANIA  SAVINGS  BANK,  KINGS  COUNTY,  BROOKLYN 

(375  Fulton  Street;  incorporated  1867) 

A.  Goepel,  President  J.  C.  M.  Lorenz,  Secretary 

TRUSTEES: 
Adolph  Goepel,  Chas.  A.  Schieren,  P.  H.  Reppenhagen,  T.  EUett  Hodgskin, 
Edward  L.  Graef,  Jacob  Dangler,  August  Jahn,  J.  C.  Hacker,  J.  F.  Hildebrand, 
Richard  Kny,  Otto  Wissner,  G.  W.  Rasch,  J.  R.  Mannheim,  Herman  A.  Metz, 
Louis  Scheling,  Frederick  Renken,  William  Rasmus. 

GOSHEN  SAVINGS  BANK,  GOSHEN 

(11  West  Main  Street;  incorporated  187 1) 
William  D.  Van  Vllet,  President  Henry  B.  Knight,  Treasurer 

TRUSTEES: 
Henry  Bacon,  Frank  Drake,  Seneca  Jessup,  WiUiam  Kniffin,  Henry  B.  Knight 
Ralph  L.  McGeoch,  Thomas  Mould,  Edwin  L.  Boys,  Aaron  V.  D.  Wallace, 
Joseph  R.  Weir,  William  A.  Wells,  Harry  B.  Smith,  Wm.  D.  Van  Vhet. 

GREATER  NEW  YORK  SAVINGS  BANK,  BROOKLYN 

(498  Fifth  Avenue;  incorporated  1897) 
C.  J.  Obermayer,  President  Wm.  Obermayer,  Secretary 

TRUSTEES: 
C.  J.  Obermayer,  Charles  Ruston,  William  J.  Maxwell,  W.  F.  Vanden  Houten, 
Allan  Bowie,  Thomas  Murphy,  Alex.  G.  Calder,  Frank  A.  Selle,  Milo  M.  Beld- 
ing,  Jr.,  H.  B.  McNair,  Chas.  G.  Balmanno,  Wm.  Obermayer,  W.  M.  Meserole, 
Adolph  Rehbein,  Walter  Critchley,  John  Lamont,  Archibald  Simpson,  Gustave 
Hartung,  John  E.  Ruston,  Frederick  W.  Starr,  Wm.  W.  Spence,  Ludwig  Merk- 
lein,  GuyLoomis,  Wm.  D.  Buckner. 

GREENBURGH  SAVINGS  BANK,  DOBBS  FERRY 

(93  Main  Street;  incorporated  1869) 
W.  Ward  Tompkins,  President  W.  Howard  Losee,  Secretary 

TRUSTEES: 
W.  W.  Tompkins,  Thomas  Losee,  Thomas  Maher,  Charles  G.  Storms,  Syl- 
vester L.  Storms,  Charles  H.  Bevers,  Henry  Y..  Bliss,  Louis  F.  Murray,  Sylvester 
Buckhout,  Robert  Denniston,  Matthew  Alhson,  Jerome  Bradley,  Walter  Keys, 
W.  Howard  Losee,  Anthony  S.  Lester. 


598  APPENDIX 

GREENPOINT  SAVINGS  BANK,  BROOKLYN 

(807  Manhattan  Avenue;  incorporated  1868) 
Ephraim  a.  Walker,  President  George  W.  Felter,  Secretary 

TRUSTEES: 
Ephraim  A.  Walker,  John  D.  Felter,  Peter  Burden,  Henry  Ducker,  Donald  A. 
Manson,  Lewis  Jurgens,  Jas.  A.  McCafferty,  George  W.  Felter,  David  Martin, 
Albert  L.  Perry,  Frank  S.  Harlow,  Femand  S.  Bellevue,  Chas.  H.  Reynolds. 

GREENWICH  SAVINGS  BANK,  NEW  YORK  CITY 

(246  and  248  Sixth  Avenue;  incorporated  1833) 
James  Qxtinlan,  President  Charles  M.  Dutcher,  Treasurer 

TRUSTEES: 
Lowell  Lincoln,  Edward  N.  Tailer,  Algernon  S.  Frissell,  David  M.  Morrison, 
James  Quinlan,  Wm.  R.  Stewart,  Alfred  L.  White,  B.  Aymar  Sands,  L.  K. 
Wilmerding,  Chas.  D.  Dickey,  Theo.  D.  Whitmarsh,  Bradish  Johnson,  Geo.  A. 
Morrison,  William  A.  Street,  Carl  Schefer,  Chas.  F.  Hoffman,  Frank  H.  Dodd, 
John  H.  Rhoades,  Arthur  Iselin,  Francis  M.  Bacon,  Jr.,  C.  N.  Bliss,  Jr.,  George 
Blagden,  Henry  C.  Swords,  B.  Ogden  Chisolm,  Lawrence  L.  Gillespie,  Allen 
Wardwell,  Edwin  S.  Marston,  Edwin  G.  Merrill,  W.  de  L.  Kountze,  Albert  H. 
Wiggin,  Gates  W.  McGarrah,  Elgin  R.  L.  Gould,  Archibald  D.  Russell. 

♦HAMBURG  SAVINGS  BANK,  BROOKLYN 

(1451  Myrtle  Avenue;  incorporated  1906) 
James  Moffett,  President  George  C.  Unbescsheider,  Secretary 

TRUSTEES: 
James  Moffett,  David  Engel,  N.  A.  Stemmermann,  H.  L.  Schelling,  Henry  C. 
Bohack,  Albert  L.  Levi,  Theodore  C.  Eppig,  H.  J.  Holtermann,  Chas.  Aichmann, 
Rudolph  Stutzmann,  Ernest  A.  Fleischer,  Otto  Spangenberg,  Henry  C.  Bain- 
bridge,  Wm.  P.  Boggs,  Robert  E.  Moffett,  David  Schmidt. 

HARLEM  SAVINGS  BANK,  NEW  YORK  CITY 

(124  East  125th  Street;  incorporated  1863) 
WiLLLVM  E.  Trotter,  President  Thomas  R.  Ebert,  Secretary 

TRUSTEES: 
William  E.  Trotter,  WilUam  T.  Purdy,  Granville  F.  Dailey,  William  Somer- 
ville,  John  J.  Bell,  Frank  E.  Wise,  Henry  B.  Pye,  M.  J.  Ennis,  John  F.  Steeves, 
Walter  P.  Silleck,  Ohn  J.  Stephens,  Warren  A.  Leonard,  Alexander  Walker, 
William  Hills,  Thomas  R.  Ebert,  Ransom  E.  Wilcox,  James  A.  Bennett. 


HOME   SAVINGS   BANK    OF   THE    CITY    OF   ALBANY,   ALBANY 

(13  North  Pearl  Street;  incorporated  1871) 
David  A.  Thompson,  President  Wm.  F.  Hourigan,  Treasurer 

TRUSTEES: 
Thomas  Austin,  David  A.  Thompson,  Samuel  L.  Munson,  Henry  Russell, 
William  Sayles,  M.   W.  Tebbutt,   Samuel  C.  Wooster,  William  McDonald, 
Howard  N.  Fuller,  Thomas  R.  Ward,  Jr.,  J.  Edward  Poole,  W.  W.  Batchelder, 
Geo.  W.  Van  Slyke,  Silas  Sporborg,  Wm.  F.  Hourigan,  Hildreth  J.  Ackroyd. 

*Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


APPENDIX  599 

HOME  SAVINGS  BANK,  BROOKLYN 

(804  Manhattan  Avenue;  incorporated  1906) 
Geo.  H.  Gerard,  President  V.  M.  Powell,  Cashier 

TRUSTEES: 
George  H.  Gerard,  M.  W.  Gleason,  John  W.  Burr,  John  J.  Cashman,  Thos. 
F.  Kelly,  Louis  Stem,  Oscar  A.  Boch,  Chas.  F.  Ball,  Chas.  W.  Griffin,  Edgar  H. 
Hazelwood,  Edwin  J.  Sutphin,  Thomas  F.  Kelly,  J.  R.  Hazelwood,  M.  H.  Kavan- 
agh,  George  H.  Rowe. 


HOME  SAVINGS  BANK,  WHITE  PLAINS 

(114  Central  Avenue;  incorporated  1893) 
David  Cromwell,  President  John  F.  Krepps,  Secretary 

TRUSTEES: 
Henry  R.  Barrett,  T.  E.  Carpenter,  David  Cromwell,  Charles  J.  F.  Decker, 
Henry  P.  Griffin,  Charles  Hammond,  Harry  S.  Hamilton,  James  F.  Horan, 
Charles  D.  Horton,  Harvey  Husted,  John  Y.  Lavery,  F.  Herbert  Nowill,  Will- 
iam H.  Lyon,  Aaron  Radick,  Edward  Schirmer,  Stephen  C.  Smith,  Elijah  C. 
Sniffen,  John  F.  Krepps,  J.  T.  Lockwood,  William  H.  Lyon. 


HUDSON  CITY  SAVINGS  INSTITUTION,  HUDSON 

(560  Warren  Street;  incorporated  1850) 
R.  B.  Benedict,  President  S.  Mitchell  Rainey,  Treasurer 

TRUSTEES: 
Russel  B.  Benedict,  Louis  A.  Bristol,  Noah  H.  Browning,  Louis  P.  Church, 
A.  V.  S.  Cochrane,  Herman  F.  Dernell,  Robert  W.  Evans,  John  W.  Gillette, 
Frank  B.  Harder,  Jacob  P.  Mesick,  S.  Mitchell  Rainey,  Chas.  A.  Van  Deusen, 
Everts  Ten  Broeck. 


IRVING  SAVINGS  INSTITUTION,  NEW  YORK  CITY 

(115  Chambers  Street;  incorporated  1851) 
Hampden  E.  Tester,  President  George  B.  Dunning,  Secretary 

TRUSTEES: 
Wm.  H.  B.  Totten,  John  W.  Nix,  Henry  Kroger,  John  O.  Williams,  Wm.  C. 
Demorest,  James  H.  Killough,  D.  Beckermann,  Samuel  S.  Conover,  George  B. 
Dunning,  Hampden  E.  Tener,  Samuel  B.  Downes,  John  Tiebout,  Lewis  E. 
Pierson,  Nathan  F.  Vought,  William  H.  Frame,  John  J.  Walton,  Willard  S. 
Brown,  George  N.  Robinson,  Eugene  M.  Travis. 


ITALIAN  SAVINGS  BANK  OF  THE  CITY  OF  NEW  YORK 

(64  and  66  Spring  Street;  incorporated  1896) 
Joseph  N.  Francolini,  President  Pasquale  I.  Simonelli,  Secretary 

TRUSTEES: 
Domenico  Abbate,  Antonio  C.  Astarita,  Nicholas  Barrett,  Vito  Contessa, 
Jos.  N.  Francohni,  Lawrence  M.  D.  McGuire,  Antonio  Pisani,  Celestino  Piva, 
Domenico  Saladino,  P.  I.  Simonelli,  James  J.  Slevin,  Antonio  Stella,  John  Elton 
Wayland,  Alexander  S.  Webb,  Antonio  Zucca,  Bernard  J.  McCann. 


6oo  APPENDIX 

ITHACA  SAVINGS  BANK,  ITHACA 

(ii8  North  Tioga  Street;  incorporated  1868) 
Roger  B.  Williams,  President  A.  B.  Hillick,  Treasurer 

TRUSTEES: 
Charles  H.  Blood,  Edward  H.  Bostwick,  F.  C.  Cornell,  John  C.  Gauntlett, 
Alvah  B.  Hillick,  James  A.  McKinney,  Jared  T.  Newman,  George  E.  Priest, 
David  B.  Stewart,  Henry  A.  St.  John,  Robert  H.  Treman,  Mynderse  Van  Cleef, 
Roger  B.  Williams,  Emmons  L.  WiUiams. 

JAMAICA  SAVINGS  BANK,  JAMAICA 

(360  Fulton  Street;  incorporated  1850) 
William  A.  Warnoch,  President  Martin  S.  Rapelye,  Secretary 

TRUSTEES: 
William  A.  Wamock,  William  W.  Gillen,  Stephen  Ryder,  J.  Tyler  Watts, 
Martin  S.  Rapelye,  Leander  B.  Faber,  George  K.  Meynen,  Willet  C.  Durland, 
William  L.  Wood,  Philip  M.,Wood,  Robert  W.  Higbie,  Edgar  Dubs  Shimer, 
Charles  E.  Twombly,  A.  James  Van  Siclen,  Starr  Brinckerhoff. 

JEFFERSON  COUNTY  SAVINGS  BANK,  WATERTOWN 

(202  Washington  Street;  incorporated  1859) 
A.  T,  E.  Lansing,  President  F.  H.  Waddlngham,  Treasurer 

TRUSTEES: 
F.  R.  Farwell,  D.  C.  Middleton,  O.  E.  Hungerford,  G.  V.  S.  Camp,  Geo.  C. 
Sherman,  Robt.  J.  Buck,  H.  Purcell,  S.  R.  Cleveland,  D.  M.  Anderson,  D.  M. 
Cosgrove,  A.  T.  E.  Lansing,  S.  A.  Upham,  F.  M.  Parker,  P.  A.  Pitcher. 

THE  KINGS  COUNTY  SAVINGS  INSTITUTION,  BROOKLYN 

(Broadway  corner  Bedford  Avenue;  incorporated  i860) 
HtreERT  G.  Taylor,  President  Jacob  Hentz,  Cashier 

TRUSTEES: 
Wm.  S.  Liptrott,  Edward  McGarvey,  Hubert  G.  Taylor,  John  S.  McKeon, 
George  P.  Jacobs,  Alfred  Hodges,  Augustus  P.  Day,  John  H.  Mowen,  William 
C.  Carrick,  Charles  G.  Bennett,  J.  Carhsle  Loudon,  Cornehus  E.  Donnellon 
James  R.  Brennen,  W.  Winthrop  Taylor,  S.  A.  Coykendall. 

KINGSTON  SAVINGS  BANK,  KINGSTON 

(273  Wall  Street;  incorporated  1874) 
James  A.  Betts,  President  Charles  Tappen,  Treasurer 

TRUSTEES: 
James  A.  Betts,  George  Burgevin,  Zadoc  P.  Boice,  Sam  Bernstein,  Joseph  de 
Graff,  Everett  Fowler,  John  E.  Kraft,  John  J.  Linson,  Charles  Tappen,  Myron 
Teller,  V.  B.  Van  Wagonen,  Levan  S.  Winne,  D.  N.  Mathews. 

LONG  ISLAND  CITY  SAVINGS  BANK,  LONG  ISLAND  CITY 

(Bridge  Plaza;  incorporated  1875) 
W.  J.  Burnett,  President  J.  H.  Smedley,  Secretary 

TRUSTEES: 
William  J.  Burnett,  Charles  W.  Hallett,  D.  S.  Jones,  A.  T.  Payne,  J.  Harvey 
Smedley,  C.  A.  Thompson,  H.  F.  Jones,  G.  W.  Williams,  D.  G.  Morrison,  L.  P. 
Dexter,  W.  H.  Siebrecht,  John  Harvey,  Benjamin  Moore,  H.  K.  Lines. 


APPENDIX  6oi 

MAIDEN  LANE  SAVINGS  BANK,  NEW  YORK  CITY 

(170  Broadway;  incorporated  1903) 

F.  A.  RiNGLER,  President  J.  Heynen,  Secretary 

TRUSTEES: 
Isaac  W.  Cokefair,  John  Q.  Adams,  Charles  R.  Jung,  L.  Burton  Hall,  Walter 

G.  King,  M.  R.  Maltbie,  Aug.  Oppenheimer,  Andrew  Patterson,  F.  A.  Ringler, 
Hugo  B.  Roelker,  Joel  S.  DeSelding,  Robt.  Schalkenbach,  Leopold  Stern,  C.  Ed- 
ward Billquist,  Chas.  W.  Lucas,  John  P.  Windolph,  Jacob  Werner,  Hugo  R. 
Ritterbusch,  M.  M.  Schwarzschild. 

MANHATTAN  SAVINGS  INSTITUTION,  NEW  YORK  CITY 

(644  and  646  Broadway;  incorporated  1850) 
Joseph  Bird,  President  Frank  G.  Stiles,  Secretary 

TRUSTEES: 
Henry  B.  Stokes,  Benjamin  Griffen,  Simeon  J.  Drake,  Edward  V.  Z.  Lane, 
Richard  Lathers,  Jr.,  Robert  A.  McKim,  Joseph  Bird,  Frank  G.  Stiles,  James  E. 
Ware,  Edwin  S.  Schenck,  Joseph  T.  Brown,  Samuel  Carey,  J.  McLean  Walton, 
Walter  C.  Stokes,  Erastus  T.  Tefift,  Phihp  J.  Ross,  Francis  B.  Griffin,  Herbert 
W.  ^Morse,  Z.  Taylor  Emery,  Frederic  W.  Frost,  Thomas  E.  Lovejoy. 


MATTEAWAN  SAVINGS  BANK,  BEACON 

(572  Main  Street;  incorporated  1866) 
Samuel  K.  Phillips,  President  Benjamin  Sullivan,  Treasurer 

TRUSTEES: 
Addison  G.  Ormsbe,  Benjamin  Sullivan,  B.  Frank  Greene,  Samuel  K.  Phillips, 
T.  J.  Cunningham,  Garret  Storm,  Frank  H.  Brett,  Wm.  H.  Southard,  Benj.  I. 
D.  Roosa,  John  O.  Wixom,  Peter  H.  Vosburgh,  Gustave  A.  Schrader,  Sherwood 
Phillips,  Myron  Smith,  F.  H.  Van  Houten,  John  H.  Ljoich,  Herbert  F.  Steams, 
Louis  E.  Kampf,  Henry  S.  Comey,  Eugene  B.  Smith,  Henry  D.  Jackson. 

MECHANICS'  AND  FARMERS'  SAVINGS  BANK,  ALBANY 

(63  State  Street;  incorporated  1855) 

Dudley  Olcott,  President 

Clarence  W.  Stevens,  Secretary  Robert  Olcott,  Treasurer 

TRUSTEES: 
Dudley  Olcott,  Charles  Newman,  Daniel  Leonard,  Robert  Olcott,  James 
McCredie,  Nathan  Hatch,  Parker  Coming,  Willard  M.  Douglas,  Isaac  D.  F. 
Lansing,  A.  Page  Smith,  Charles  H.  Douglas,  John  T.  Norton,  Walter  L.  Palmer. 

MECHANICS'  SAVINGS  BANK,  BEACON 

(91  Main  Street;  incorporated  1866) 
John  T.  Smith,  President  Bertram  L,  Smith,  Treasurer 

TRUSTEES: 
John  T.  Smith,  Benjamin  Hammond,  John  P.  Rider,  John  W.  Corwin,  Ber- 
tram L.  Smith,  Preston  Greene,  Ferd.  Loughran,  Chester  Bond,  Hugo  Doob, 
Andrew  Barnes,  James  Van  Houten,  George  W.  Beach,  Aaron  E.  Aldridge,  Wm. 
J.  Conklin,  Frank  L.  Howard,  S.  M.  Davidson,  A.  H.  Blackburn,  Robert  R. 
Neade,  W.  T.  Pralatowski. 


6o2  APPENDIX 

MECHANICS'  SAVINGS  BANK,  COHOES 

(89-91  Remsen  Street;  incorporated  1873) 
Rodney  Wilcox,  President  G.  W.  Hxjmphreys,  Secretary 

TRUSTEES: 
RodneyWilcox,Abner  J.  Griffin,  Frank  Tessier,  Edward  Foley,  James  S.  Clute, 
John  E.  MacLean,  G.  W.  Humphreys,  Wm.  B.  Le  Roy,  Hugh  Graham,  George 
Oliver,  William  E.  Thorn,  Andrew  Scotland,  Richard  Bolton,  John  F.  Reavy, 
Jay  Gilbert,  Thos.  H.  Sprague,  Henry  L.  Shaver,  S.  T.  Page. 

MECHANICS'  SAVINGS  BANK,  ROCHESTER 

(18  Exchange  Street;  incorporated  1867) 
J.  J.  Bausch,  President  Fedor  Willimek,  Asst.  Secretary 

TRUSTEES: 
John  J.  Bausch,  A.  P.  Little,  WilHam  R.  Seward,  Louis  J.  Ernst,  James  H. 
Boucher,  Wendell  J.  Curtis,  William  Karle,  WiUiam  B.  Hale,  Wilmot  Castle, 
James  C.  Clements,  Thomas  B.  Dunn,  John  S.  Bronk,  Chas.  C.  Beahan,  Morris 
D.  Knapp,  George  W.  Robeson., 

METROPOLITAN  SAVINGS  BANK,  NEW  YORK  CITY 

(59-61  Cooper  Square;  incorporated  1852) 
J.  B.  CuRREY,  President  Edward  Sherer,  Secretary 

TRUSTEES: 
Aug.  S.  Hutchins,  William  Sherer,  Jonathan  B.  Currey,  Waldo  Hutchins, 
William  E.  Hutchins,  Grove  P.  Mitchell,  Willis  S.  Paine,  Augustus  K.  Sloan, 
Robert  D.  Andrews,  Augustus  H.  Sands,  Edward  H.  Swan,  Chas.  P.  Emmons, 
Edward  Sherer,  DeWitt  C.  Falls,  John  S.  Spencer. 

MIDDLETOWN  SAVINGS  BANK,  MIDDLETOWN 

(2  South  Street;  incorporated  1866) 
George  A.  Swayze,  President  Harold  B.  Woodward,  Secretary 

TRUSTEES: 
Daniel  H.  Bailey,  Edmund  Millen,  Jesse  W.  Canfield,  John  E.  Iseman,  James 

A.  Clark,  John  W.  Slauson,  Edward  Canfield,  Charles  L.  Mead,   Geo.  W. 
Ballou,  James  E.  Gibbs,  James  H.  Smith,  H.  B.  Woodward,  George  A.  Swayze. 

MONROE  COUNTY  SAVINGS  BANK,  ROCHESTER 

(33-35  State  Street;  incorporated  1850) 
James  E.  Booth,  President  Hxytd  Hoyt,  Secretary 

TRUSTEES: 
James  E.  Booth,  Rufus  K.  Dryer,  Alex.  M.  Lindsay,  Cyrus  F.  Paine,  Henry  A, 
Strong,  Thomas  J.  Devine,  William  B.  Lee,  Phar.  V.  Crittenden,  Edward  Bausch, 
William  Carson,  William  C.  Barry,  David  Hoyt,  Martin  F.  Bristol,  Joseph 
Michaels,  Wm.  A.  Hubbard,  Jr. 

NATIONAL  SAVINGS  BANK  OF  THE  CITY  OF  ALBANY,  ALBANY 

(70  and  72  State  Street;  incorporated  1868) 
James  H.  Manning,  President  Frederic  B.  Stev'ens,  Treasurer 

TRUSTEES: 
James  H.  Manning,  Chas.  J.  Buchanan,  Harry  C.  Cushman,  W.  M.Woodward, 
Charles  Gibson,  James  B.  McEwan,  Edward  J.  Hussey,  James  F.  Maas,  Syd- 
ney T.  Jones,  Thomas  A.  Horton,  Charles  I.  Oliver,  Edwin  L.  Draper,  Frederic 

B.  Stevens,  Edgar  M.  Haines,  Charles  AL  Stuart,  Jonas  Muhlfelder,  Frank 
Sherman. 


APPENDIX  603 

NEWBURGH  SAVINGS  BANK,  NEWBURGH 

(40  Smith  Street;  incorporated  1852) 
Thomas  F.  Balfe,  President  Frederick  C.  Balfe,  Treasurer 

TRUSTEES: 
Thomas  F.  Balfe,  Isaac  C.  Chapman,  William  O.  Mailler,  Joseph  Chadwick, 
A.  Y.  Weller,  George  W.  Green,  F.  W.  Senff,  William  F.  Cassedy,  S.  V.  Schoon- 
maker,  Frederick  C.  Balfe,  John  T.  Howell,  Hiram  Merritt,  Thos.  F.  Chadwick. 

NEW  PALTZ  SAVINGS  BANK,  NEW  PALTZ 

(Main  Street;  incorporated  1871) 
Lewis  H.  Woolsey,  President  Abram  B.  Du  Bois,  Secretary 

TRUSTEES: 
Lewis  H.  Woolsey,  Jesse  Eltinge,  Abram  B.  Du  Bois,  Daniel  Black,  John  J. 
Hull,  A.  W.  Williams,  Thomas  Snyder,  Frank  J.  Lefever,  Abram  P.  Lefever, 
C.  I.  Lefever,  Luther  Hasbrouck,  C.  L.  Van  Orden,  Charles  M.  Harcourt,  Josiah 
P.  Lefever,  Simon  Du  Bois. 

NEW  YORK  SAVINGS  BANK,  NEW  YORK  CITY 

(83  Eighth  Avenue;  incorporated  1854) 
William  Felsinger,  President  James  L.  Wandling,  Treasurer 

TRUSTEES: 
Archibald  M.  Pentz,  John  Webber,  William  Felsinger,  James  L.  Wandling, 
Eibe  D.  Cordis,  Benj.  A.  Williams,  John  H.  Armstrong,  John  A.  Greene,  Thomas 
P.  Spencer,  WiUiam  J.  Hoe,  Alexander  M.  Welch,  William  W.  Hall,  Frank  B. 
Smidt. 

NIAGARA  COUNTY  SAVINGS  BANK,  NIAGARA  FALLS 

(304  Niagara  Street;  incorporated  1890) 
C.  M.  Young,  President  John  MacKay,  Secretary 

TRUSTEES: 
L.  W.  Pettebone,  Alex.  J.  Porter,  Julius  Krakoski,  Francis  H.  Salt,  Fred.  J. 
Coe,  George  F.  Nye,  William  C.  Wallace,  Joseph  E.  Montague,  John  T.  Wil- 
liamson, Chris.  M.  Young,  Augustus  G.  Porter,  Eugene  Cary,  De  Lancy  Ran- 
kine,  John  H.  Ellenbaum,  Richard  Crick,  Frederick  Chormann,  Drake  Whitney, 
John  MacKay,  Henry  Hubbs. 

NORTH  RIVER  SAVINGS  BANK,  NEW  YORK  CITY 

(31  West  Thirty-fourth  Street;  incorporated  1866) 
Adolpho  H.  Fischer,  President  George  T.  Connett,  Secretary 

TRUSTEES: 
Benjamin  F.  Mills,  Adolpho  H.  Fischer,  Christian  F.  Tietjen,  John  H.  Selmes, 
Noel  B.  Sanborn,  Charles  Rohe,  Thomas  Stokes,  Robert  H.  Goffe,  R.  H.  Mac- 
donald,  William  H.  Sage,  Albert  B.  Ashforth,  John  A.  Hance,  Chas,  W.  Car- 
penter, Charies  H.  Parsons,  W.  C.  Otterson,  T.  A.  Ball,  Theodore  H.  Banks. 

NORTH  SIDE  SAVINGS  BANK,  NEW  YORK  CITY 

(3230  Third  Avenue;  incorporated  1905) 
John  G.  Borgstede,  President  Arthur  A.  Ekirch,  Secretary 

TRUSTEES: 
John  G.  Borgstede,  T.  J.  Chabot,  T.  Joseph  Dunn,  J.  Clarence  Davies,  Henry 
Hahnenfeld,  John  C.  Heintz,  Thomas  J.  Higgins,  Louis  F.  Kuntz,  Richard  W. 
Lawrence,  Chas.  F.  Minor,  Geo.  N.  Reinhardt,  John  Riegelman,  George  M.  S. 
Schulz,  Constantin  Wagner,  Fred.  H.  Wafer,  George  Wohn,  Joseph  Miller, 
Christian  Rieger,  Jr. 


6o4  APPENDIX 

ONEIDA  COUNTY  SAVINGS  BANK,  ROME 

(178  West  Dominick  Street;  incoqaorated  1869) 
Charles  W.  Lee,  President  A.  E.  Weatherbee,  Treasurer 

TRUSTEES: 
F.  M.  Orton,  D.  L.  Greenfield,  Howard  C.  Wiggins,  John  R.  Edwards,  W.  W. 
Parry,  Lawrence  Carey,  Arthur  J.  Wylie,  John  S.  Wardwell,  Charles  W.  Lee, 
James  P.  Obey,  F.  G.  Rathbun,  D.  L.  Bradt. 

ONEIDA  SAVINGS  BANK,  ONEIDA 

(103-105  Main  Street;  incorporated  1866) 
R.  B.  Downing,  President  H.  L.  Baldwin,  Treasurer 

TRUSTEES: 
Roswell  B.  Downing,  Eugene  E.  Coon,  Ira  L.  Snell,  Theo.  F.  Hand,  Jr.,  E. 
Emmonds  Coe,  Le  Grand  Colton,  E.  Leland  Hunt,  WiUiam  M.  Baker,  Geo.  A. 
MarceUus,  Anthony  B.  Munroe,  Howard  L.  Baldwin,  Rhody  Toher,  H.  W. 
Coley. 

ONONDAGA  COUNTY  SAVINGS  BANK,  SYRACUSE 

(loi  South  Salina  Street;  incorporated  1855) 
Henry  M.  Rowling,  President  Douglas  E,  Petit,  Treasurer 

TRUSTEES: 
Geo.  M.  Barnes,  Chas.  E.  Chappell,  W.  D.  Dunning,  Charles  A.  Hudson, 
Salem  Hyde,  A.  E.  McChesney,  T.  Wm.  Meachem,  A.  E.  Nettleton,  Anson  N. 
Palmer,  Hiram  W.  Plimib,  John  R.  Clancy,  Henry  M.  Rowling,  Adolph  H. 
Schwarz,  Charles  W.  Snow,  Charles  L.  Stone,  Edward  A.  Powell,  Clinton  T. 
Rose. 

OSWEGO  CITY  SAVINGS  BANK,  OSWEGO 

(214  West  First  Street;  incorporated  1859) 
Elliott  B.  Mott,  President  Charles  S.  Wright,  Treasurer 

TRUSTEES: 
Karl  Kellogg,  Niel  Gray,  Jr.,  Benjamin  Denton,  John  Smith,  James  B.  Far- 
well,  Edward  H.  Farrell,  James  K.  Stockwell,  Edgar  D.  Johnson,  Charles  H. 
Bond,  Thomas  F,  Gleason,  Elisha  B.  Powell,  Elliott  B.  Mott,  Arthur  C.  Hall, 
John  D.  Higgins,  Frank  E.  Sayer,  Luther  W.  Mott. 

OSWEGO  COUNTY  SAVINGS  BANK,  OSWEGO 

(44  East  Bridge  Street;  incorporated  1870) 
W.  B.  Couch,  President  James  Dunlap,  Treasurer 

TRUSTEES: 
Cadwell  B.  Benson,  Lawrence  Clancy,  S.  Mortimer  Coon,  W.  B.  Couch,  R. 
Arthur  Downey,  Oren  F.  Gaylord,  Peter  Hilbert,  Frederick  B.  Shepherd,  O.  S. 
Osterhout,  Hubert  J.  Peebles,  Charles  A.  Tanner,  Herbert  A.  Wilcox. 

PAWLING  SAVINGS  BANK,  PAWLING 

(Incorporated  1870) 
Wm.  H.  Osborn,  Vice-President  Geo.  A.  Daniels,  Treasurer 

TRUSTEES: 
William  H.  Taber,  Henry  A.  Holmes,  George  H.  Adams,  Henry  S.  Wanzer, 
Merrick  D.  Green,  Howard  N.  Allen,  Benjamin  F.  Burr,  Francis  F.  Cole,  Wil- 
liam H.  Osborn,  George  A.  Daniels,  Henry  D.  Warner,  Fred.  C.  Taber,  Frank 
A.  Denton,  Fraiik  Hoag,  Orson  W.  Sloat. 


APPENDIX  605 

PEEKSKILL  SAVINGS  BANK,  PEEKSKILL 

(916  South  Street;  incorporated  1859) 
Charles  C.  Knight,  President  Sanford  R.  Knapp,  Secretary 

TRUSTEES: 
Sanford  R.  Knapp,  Henry  L.  Armstrong,  Ira  D.  Strang,  Frederick  Lent,  Oscar 
Grifim,  Alonzo  Seymour,  Robert  S.  Allen,  Frank  M.  Dain,  Edward  E.  Young. 
J.  R  Decatur,  Charles  C.  Knight,  Edward  G.  Halsey,  William  H.  Croft,  George 
W.  Buchanan,  Edmund  Jordan. 


*PEOPLE'S  BANK  FOR  SAVINGS,  NEW  ROCHELLE 

(252  Huguenot  Street;  incorporated  1906) 
Henry  M.  Lester,  President  A.  L.  Hammett,  Secretary 

TRUSTEES: 
W.  W,  Bissell,  John  Conlon,  George  T.  Davis,  R.  C.  Eddy,  Mott  Emigh, 
G.  F.  Flandreaux,  J.  F.  Frantz,  Geo.  E.  Galgano,  William  Kirchhoff,  J.  F.  Lamb- 
den,  Henry  M.  Lester,  George  W.  Mahlstedt,  W.  R.  Marvin,  John  F.  New,  John 
A.  Peck,  Charles  Pryer,  Samuel  F.  Swinburne,  L.  E.  Van  Etten,  Howard  R.  Ware, 
George  Watson. 


PEOPLE'S  SAVINGS  BANK  OF  THE  TOWN  OF  YONKERS, 
YONKERS,  N.  Y. 

(12  and  14  Getty  Square;  incorporated  1866) 
Charles  E.  Gorton,  President  Frank  E.  Wheeler,  Treasurer 

TRUSTEES: 
Frank  E.  Wheeler,  Charles  E.  Gorton,  Robert  H.  Neville,  Alexander  Saunders, 
Gustav  Schleuter,  Charles  E.  Skinner,  Andrew  B.  Barr,  Alonzo  P.  Hazard,  Albert 
C.  Benedict,  George  H.  Warren,  Joseph  Miller,  Campbell  Scott,  Ralph  B. 
Hibbard,  Louis  Spreckles,  William  Halley,  Arthur  Land  E.  B.  Embree. 


PORT  CHESTER  SAVINGS  BANK,  PORT  CHESTER 

(North  Main  and  Willett  streets;  incorporated  1865) 
William  Ryan,  President  John  W.  Diehl,  Cashier 

TRUSTEES: 
William  Ryan,  Edwin  F.  Studwell,  John  Miller,  Ellwood  Burdsall,  H.  L. 
Marshall,  Jr.,  Josiah  N.  Wilcox,  John  W.  McCarty,  Charles  H.  Tibbits,  Robert 
B.  M.  Cook,  Leander  Horton,  John  W.  Diehl  Frank  H.  Brown,  Thomas  Byrnes, 
Jr.,  Theodore  C.  Parker,  Samuel  Clock. 


POUGHKEEPSIE  SAVINGS  BANK,  POUGHKEEPSEE 

(21  Market  Street;  incorporated  1831) 
Floy  M.  Johnston,  President  John  K.  Sague,  Treasurer 

TRUSTEES: 
Frank  B.  Lown,  Henry  V.  Pelton,  Edward  S.  Atwater,  Henry  E.  Lowey,  Wm. 
T.  Reynolds,  John  C.  Otis,  Floy  M.  Johnston,  Guilford  Dudley,  Charles  F.  Cos- 
sum,  John  K.  Sague,  Clarence  W.  Pierce,  Henry  Booth,  James  H.  Young. 


*Tho3e  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


6o6  APPENDIX 

PRUDENTIAL  SAVINGS  BANK,  BROOKLYN 

(Broadway  and  Vernon  Avenue;  incorporated  1908) 

Dietrich  W.  Kaatze,  President  Hollis  H.  Searles,  Cashier 

TRUSTEES: 
Dietrich  W.  Kaatze,  John  Auer,  Sr.,  John  H.  Scannell,  Herbert  A.  O'Brien, 
Francis  B.  Mullin,  Hollis  H.  Searles,  Louis  P.  Buck,  Charles  Wiesman,  Joseph 
F.  Bischoff ,  Alfred  E.  Peck,  Manasseh  Miller,  August  Hasenflug,  Chas.  VoUmer, 
Robert  W.  Martin,  Wm.  H.  Frank,  Jos.  VoUkommer,  Wm.  J.  Elliott,  Thos.  H. 
Ireland,  George  P.  Busch,  Le^vis  C.  Gehring. 

PUTNAM  COUNTY  SAVINGS  BANK,  BREWSTER 

(Main  Street;  incorporated  1871) 
Warren  S.  Paddock,  President  George  H.  Reynolds,  Secretary 

TRUSTEES: 
Warren  S.  Paddock,  Myron  P.  Howes,  Frederic  S.  Barnum,  David  P.  Vail, 
L.  Starr  Bamum,  Alex.  F.  Lobdell,  Arthur  P.  Budd,  William  E.Smith,  Emerson 
W.  Addis,  H.  Frank  Paddock,  Oscar  Bailey,  Geo.  H.  Reynolds,  Daniel  M. 
Barnes,  Fred.  A.  Purdy,  Benjamin  O.  Nichols,  S.  Pierr  Fields. 

QUEENS  COUNTY  SAVINGS  BANK,  FLUSHING 

(80  Main  Street;  incorporated  1859) 
William  T.  James,  President  A.  C.  Hageman,  Cashier 

TRUSTEES: 
Henry  L.  Bogert,  Joseph  Dykess,  John  W.  Weed,  E.  Covert  Hulst,  Abram  C. 
Hageman,  John  H.  Wilson,  John  Hepburn,  William  T.  James,  Frank  A.  Collins, 
George  E.  Lewis,  Harrison  S.  Moore,  James  H.  Quinlan,  D.  H.  Vandevvater, 
James  A.  Macdonald,  David  Master. 

RHINEBECK  SAVINGS  BANK,  RHINEBECK 

(15  Montgomery  Street;  incorporated  i860) 
Augustus  M.  Trax^er,  President  Thaddeus  A.  Traver,  Treasurer 

TRUSTEES: 
Augustus  M.  Traver,  M.  V.  B.  Schryver,  William  Thomson,  Thad.  A.  Traver, 
Martin  Heermance,  C.  S.  Van  Etten,  A.  Lee  Wager,  Jas.  S.  Armstrong,  William 
R.  Carroll,  Mandeville  S.  Frost,  Ekner  Coon, Chas.  B.  Hoffman,  Eugene  P.  Budd, 
Charles  Ferris,  Tracy  Dows. 

ROCHESTER  SAVINGS  BANK,  ROCHESTER 

(47  Main  Street,  West;  incorporated  1831) 
Harold  P.  Brewster,  President  Henry  S.  Hanford,  Treasurer 

TRUSTEES: 
Rufus  A.  Sibley,  Granger  A.  Hollister,  James  S.  Watson,  Hiram  W.  Sibley, 
Erickson  Perkins,  Josiah  Anstice,  Thos.  W.  Finucane,  Harold  P.  Brewster, 
George  Eastman,  James  C.  Cutler,  William  S.  Morse,  J.  Craig  Powers,  Wm.  A. 
E.  Drescher,  Edward  Harris,  Daniel  M.  Beach. 

RICHMOND  COUNTY  SAVINGS  BANK,  WEST  NEW  BRIGHTON 

(1619  Richmond  Terrace;  incorporated  1886) 
John  ¥.  Syi.nii,  President  George  H.  Treadwell,  decretory 

TRUSTEES: 
John  F.  Smith,  Azel  F.  Merrell,  Benedict  Parker,  George  M.  Matthius,  Frank 
W.Tompkins,  John  A.  Snyder,  Henry  P.  Morrison,  George  H.  Tredwell,  Wm.  J. 
Davidson,  Samuel  Eckstein,  Albert  K.  Buhl,  Samuel  W.  Fancher,  Melvin  L. 
Decker,  Chas.  E.  Simonson,  Jacob  I.  Housman,  Joseph  H.  Maloy. 


APPENDIX  607 

RTVERHEAD  SAVINGS  BANK,  RIVERHEAD 

(Main  Street;  incorporated  1872) 
Chas.  M.  Blydenburgh,  Presidettt  Usher  B.  Howell,  Secretary 

TRUSTEES: 
Timothy  M.  Griffing,  George  W.  Cooper,  Geo.  F.  Stackpole,  C.  M.  Blyden- 
burgh, George  M.  Vail,  Usher  B.  Howell,  Joseph  M.  Belford,  Thad.  N.  Benjamin, 
Otis  G.  Pike,  Henry  H.  Preston,  Erastus  F.  Post,  Nat.  S.  Tuthill,  George  H. 
Perkins,  F.  Porter  Howell,  Jacob  Meyer,  Frank  H.  Wells,  O.  Edmund  Griswold, 
Elbert  M.  Davis,  Abram  S.  Post,  Willis  D.  Van  Brunt,  Gilbert  D,  Rogers. 

ROME  SAVINGS  BANK,  ROME 

(122  West  Dominick  Street;  incorporated  1851) 
Samuel  H.  Beach,  President  James  T.  Stone,  Treasurer 

TRUSTEES: 
Samuel  H.  Beach,  Henry  Barnard,  Sr.,  John  D.  McMahon,  Theo.  J.  Mowry, 
James  M.  Ethridge,  Carl  Simon,  Fred.  M.  Shelley,  Geo.  G.  Clarabut,  James  A. 
Bailey,  Herbert  T.  Dyett,  James  A.  Spargo,  George  A.  Clyde,  A.  R.  Kessinger. 

RONDOUT  SAVINGS  BANK,  KINGSTON 

(20  Ferry  Street;  incorporated  1868) 
Isaac  M.  North,  President  J.  E.  Derrenbacher,  Secretary 

TRUSTEES: 
S.  D.  Coykendall,  Isaac  M.  North,  John  S.  Thompson,  Wesley  D.  Hale,  F.  H. 
Grifi&ths,  Frederick  Stephan,  Jr.,  Alexander  A.  Stern,  J.  D.  Schoonmaker,  J.  E. 
Derrenbacher,  James  G.  Rose,  Harry  H.  Fleming,  Nicholas  Stock,  Edward  Coy- 
kendall. 

ROSLYN  SAVINGS  BANK  OF  ROSLYN,  ROSLYN 

(Incorporated  1875) 
Thomas  Mott,  President  Frederick  E.  Willits,  Treasurer 

TRUSTEES: 
Henry  M.  W.  Eastman,  Thomas  Mott,  Joseph  H.  Bogart,  George  P.  Titus, 
Frederick  E.  WiUits,  Thos.  W.  Albertson,  Frederick  C.  Hicks,  Daniel  J.  Hege- 
man,  John  C.  Baker,  Richard  U.  Clark,  Jotham  Post,  S.  T.  Rushmore,  William 
W.  Cocks,  J.  Clifton  Monfort,  Richard  Downing.  William  Witte,  Daniel 
Underbill,  John  A.  Albertson,  Daniel  S.  Woolley,  Eugene  W.  Denton,  Charles 
E.  Conklin,  Alfred  V.  Eraser,  James  Willets,  George  S.  Emory,  George  W. 
Eastman. 

*SAINT  LAWRENCE   COUNTY   SAVINGS   BANK,    OGDENSBURG 

(79  State  Street;  incorporated  1909) 
Andrew  Irving,  President  James  E.  Kelly,  Treasurer 

TRUSTEES: 
Ernest  M.  Akins,  Frank  W.  Ames,  Frank  Chapman,  George  F.  Darrow,  Ed- 
ward Derochie,  Robt.  J.  Donahue,  John  P.  Dunne,  Edgar  B.  Elethorp,  John 
Hannan,  John  C.  Howard,  Felix  Hulser,  Richard  P.  Hutchins,  Andrew  Irving, 
Walter  G.  Kellogg,  James  E.  Kelly,  Samuel  W.  Leonard,  Grant  C.  Madill,  Chas. 
D.  Randies,  Thomas  Spratt,  John  B.  Tyo,  Geo.  E.  Van  Kennen,  James  M.  Wells, 
Abner  D.  Whitney,  Dennis  B.  Lucey,  Dennis  Lynch. 


*Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


6o8  APPENDIX 

SAG  HARBOR  SAVINGS  BANK,  SAG  HARBOR 

(Main  Street;  incorporated  i860) 
James  H.  Pierson,  President  E\t£rett  L.  Tindall,  Treasurer 

TRUSTEES: 
John  H.  Hunt,  Hervey  T.  Hedges,  Oliver  H.  Nickerson,  Henry  F.  Cook,  Wil- 
liam C.  Greene,  Everett  L.  Tindall,  William  R.  Reimann,  Olin  M.  Edwards, 
John  Y.  Convin,  Casper  Schaefer,  John  M.  Woodward,  Burton  D.  Corwin,  Ed. 
B.  Hill,  Frank  W.  Corwin,  Addison  M.  Cook,  Edward  A.  Hildreth,  Wilham  D. 
Halsey,  James  H.  Pierson,  John  Nugent,  Edgar  A.  Hildreth,  John  Scott,  Charles 
W.  Rackett,  Chas.  W.  Rackett,  Jr.,  J.  Henry  Barnes,  J.  H.  Mulford,  Joseph  S. 
Osborne,  Jonathan  Baker,  William  H.  Pierson,  Benj.  F.  Rogers,  Clifford  J. 
Foster. 

*SAUGERTIES  SAVINGS  BANK,  SAUGERTIES 

(244  Main  Street;  incorporated  1871) 
Albert  Carnwright,  President  J.  A.  Freligh,  Secretary 

■       TRUSTEES: 
Jacob  Van  Gelder,  John  W.  Shults,  Albert  Carnwright,  Alfred  P.  Lasher,  Theo. 
B.  Cornwell,  Chas.  T.  Montgomery,  Louis  J.  Butzel.  James  T.  Maxwell,  Myron 
Bedell,  E.  Clark  Reed,  Ed.  M.  Wilbur,  Charles  Lusk,  Charles  Lamb,  Orville  L. 
Cam. 

SAVINGS  BANK  OF  UTICA,  UTICA 

(233  Genesee  Street;  incorporated  1839) 
Charles  A.  Miller,  President  Rurus  P.  Birdseye,  Treasurer 

TRUSTEES: 
WiUiam  Keman,  Rufus  P.  Birdseye,  Thomas  R.  Proctor,  Charles  A.  Miller, 
Charles  S.  Symonds,  Frank  E.  Wheeler,  Theodore  S.  Sayre,  Henry  H.  Cooper, 
George  L.  Curran,  Geo.  L.  Bradford,  J.  De  Peyster  Lynch,  Charles  B.  Rogers, 
N.  E.  Devereux. 

SCHENECTADY  SAVINGS  BANK,  SCHENECTADY 

(500  State  Street;  incorporated  1834) 
Everett  Smith,  President  Allen  W.  Johnston,  Treasurer 

TRUSTEES: 
Everett  Smith,  William  L.  Pearson,  H.  W.  Deimington,  John  McDermott, 
Henry  Bradt,  Allen  W.  Johnston,  Herman  V.  Mynderse,  Lewis  A.  Skinner,  Will- 
iam Dalton,  George  E.  Emmons,  H.  Roger  Hegeman,  Chas.  S.  Washburn,  F.  W. 
McClellan. 

SEAMEN'S  BANK  FOR  SAVINGS  IN  THE  CITY  OF  NEW  YORK 

(74  and  76  Wall  Street;  incorporated  1829) 
Daniel  Barnes,  President  George  M.  Halsey,  Cashier 

TRUSTEES: 
George  H.  Macy,  Frederick  Sturges,  Anson  W.Hard,  William  E.Stiger,  George 
F.  Crane,  W.  H.  Benedict,  Anton  A.  Raven,  Daniel  Barnes,  PMward  VV.  Sheldon, 
George  C.  Clark,  P.  A.  S.  Franklin,  Eugene  Delano,  Samuel  Sloan,  Henry  R. 
Taylor,  Thomas  H.  Hubbard,  V.  Everit  Macy,  Benjamin  Strong,  Jr.,  William  A. 
Hazard. 


•Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


APPENDIX  609 

SENECA  FALLS  SAVINGS  BANK,  SENECA  FALLS 

(55  Fall  Street;  incorporated  1870) 
Edwaiu)  W.  Addison,  Presidc7it  Peter  Trautman,  Secretary 

TRUSTEES: 
Edward  W.Addison,  Norman  J.  Gould,  Chas.  F.  Hammond,  Horace  D.  Knight, 
Elias  Lester,  Fred  Maier,  Jr.,  Carl  W.  Maier,  C.  A.  MacDonald,  Chas.  S.  Sander- 
son, Fred.  L.  Story,  Peter  Troutman,  Thomas  J.  Yawger,  Henry  R.  Micks. 


SKANEATELES  SAVINGS  BANK,  SKANEATELES 

(Genesee  Street;  incorporated  1866) 
J.  Horatio  Earll,  President  Emerson  H.  Adams,  Treasurer 

TRUSTEES: 
J.  Horatio  Earll,  John  C.  Stephenson,  W.  F.  Cuddeback,  Emerson  H.  Adams, 
Philo  S.Thornton,  Geo.  D.  Cuddeback,  Henry  W.  HoUon,  David  Colton,  Charles 
W.  Hunt,  George  Smith,  Forest  G.  Weeks,  F.  Eugene  Stone,  Wm.  T.  Thome. 


SOUTH  BROOKLYN  SAVINGS  INSTITUTION,  BROOKLYN 

(160-162  Atlantic  Avenue;  incorporated  1850) 
William  J.  Coombs,  President  C.  S.  DxnsTNiNG,  Treasurer 

TRUSTEES: 
Walter  M.  Aikman,  Charles  A.  Boody,  Joseph  E.  Brown,  Thos.  O.  Callender, 
WiUiam  J.  Coombs,  Walter  V.  Cranford,  Isaac  H.  Cary,  Charles  B.  Denny,  John 
W.  Dodsworth,  Clarence  S.  Dunning,  J.  Warren  Greene,  J.  Morton  Halstead, 
Arthur  M.  Hatch,  Percy  S.  Mallett,  Edgar  McDonald,  Albro  J.  Newton,  John 
J.  Pierrepont,  Robt.  L.  Pierrepont,  Jacob  Steiner,  Joseph  H.  Sutphin,  Henry  N. 
Whitney,  William  H.  Cary,  D.  Irving  Mead,  Arnold  W.  Sherman,  William  L. 
Newton. 

SOUTHOLD  SAVINGS  BANK,  SOUTHOLD 

(Main  Street;  incorporated  1858) 
Jonathan  B.  Terry,  President  H.  Howard  Huntting,  Treasurer 

TRUSTEES: 
Jonathan  B.  Terry,  Henry  W.  Prince,  H.  Howard  Huntting,  Abraham  F. 
Lowerre,  William  H.  Terry,  Joseph  N.  Hallock,  Chas.  Gildersleeve,  WilHam  A. 
Fleet,  Silas  F.  Overton,  George  H.  Terry,  John  J.  Bartlett,  Clarence  C.  Miles, 
EUas  P.  Jennings,  John  H.  Brown,  Edward  W.  Latham,  Josiah  C.  Case,  Ralph  G. 
Duvall. 

STATEN  ISLAND  SAVINGS  BANK,  STAPLETON 

(81  Water  Street;  incorporated  1864) 
Edward  C.  Bridgman,  President  Herman  C.  Hagadorn,  Cashier 

TRUSTEES: 
E.  C.  Bridgman,  Willy  Sonntag,  W.  Hudson  Clark,  Fedor  Schmidt,  J.  B. 
Pearson,  Ernst  Wehneke,  Otto  Linderaann,  Patrick  Brady,  Ed.  C.  Meurer,  Chas. 
A.  Bruns,  Otto  P.  Heyn,  William  L.  Voorhis,  Charles  Kappes,  Edmund  L.  Judson, 
Geo.  S.  Humphrey,  J.  Ed.  Stake,  Frederick  Seemann,  John  Carmichael,  Otto  J. 
Thomen,  Carl  F.  Grieshaber,  Ernest  R.  Moody. 


6io  APPENDIX 

SUMNER  SAVINGS  BANK,  BROOKLYN 

(i2  Graham  Avenue;  incorporated  1906) 
Arthxfr  S.  Somers,  President  Wallace  L.  Conner,  Secretary 

TRUSTEES: 
Moses  Bernstein,  George  Freifeld,  Nathan  S.  Jonas,  Ralph  Jonas,  Edward 
Lazansky,  Ben  Levy,  Chas.  Lyon,  Matthew  T.  Meagher,  S.  B.  Kraus,  Henry 
Newman,  Henry  Roth,  Arthur  S.  Somers,  Victor  B.  Wolf. 

SYRACUSE  SAVINGS  BANK,  SYRACUSE 

(102  North  Salina  Street;  incorporated  1849) 
George  Doheny,  President  William  J.  Reidel,  Treasurer 

TRUSTEES: 
Jacob  Amos,  Frederick  W.  Barker,  Joseph  W.  Dawson,  Carleton  A.  Chase, 
J.  Frank  Durston,  George  Doheny,  Alan  C.  Fobes,  Frank  Hiscock,  Francis  Hen- 
dricks, Edward  Joy,  William  Muench,  Dennis  McCarthy,  A.  Judd  Northrup, 
Nicholas  Peters,  William  K.  Pierce,  Wing  R.  Smith,  De  Forest  Settle,  Leroy  B. 
Williams. 

TROY  SAVINGS  BANK,  TROY 

(State  and  Second  streets;  incorporated  1823) 

Charles  E.  Hanaman,  President  J.  Er\vin  Anthony,  Treasurer 

TRUSTEES: 
Charles  E.  Hanaman,  Walter  P.  Warren,  Edward  C.  Gale,  James  K.  P.  Pine, 
George  S.  Robinson,  Thomas  Vail,  James  H.  Caldwell,  William  F.  Gurley,  Har- 
vey S.  McLeod,  William  H.  Shields,  Frank  E.  Norton,  Henry  S.  Ludlow,  W. 
L.  Thompson,  EUas  P.  Mann,  Paul  Cook,  William  M.  Sanford. 

ULSTER  COUNTY  SAVINGS  INSTITUTION,  KINGSTON 

(280  Wall  Street;  incorporated  185 1) 
E.  H.  Loughran,  President  John  B.  Alliger,  Treasurer 

TRUSTEES: 
John  B.  Alliger,  Harry  R.  Brigham,  Peter  C.  Black,  Howard  Chipp,  Philip 
Elting,  George  Hutton,  E.  H.  Loughran,  John  L.  McGrath,  James  S.  Winne, 
Charles  S.  Wood,  Geo.  W.  Washburn,  J.  M.  Schaffer,  A.  W.  Thompson. 

UNION  SAVINGS  BANK  OF  WESTCHESTER  COUNTY, 
MAMARONECK 

(60  West  Post  Road;  incorporated  1887) 
Rettben  G.  Brewer,  President  Geo.  L.  Lyon,  Treasurer 

TRUSTEES: 
Bradford  Rhodes,  William  A.  Boyd,  Thomas  J.  Meighan,  Reuben  G.  Brewer, 
Chas.  Field  Griffin,  Burton  C.  Meighan,  William  R.  Bull,  Edwin  T.  Cornell, 
Henry  Fatten,  George  L.  Lyon,  Henry  Moore,  Charles  C.  Holden,  Charles  M. 
Baxter,  Patrick  H.  Collins,  Samuel  R.  Bell,  Edward  M.  Clark,  Michael  Staub . 

UNION  DIME  SAVINGS  BANK,  NEW  YORK  CITY 

(701  Sixth  Avenue;  incorporated  1859) 
Alex.  P.  W.  Kinnan,  President  Francis  M.  Leake,  Treasurer 

TRUSTEES: 
Wm.  H.  Locke,  Charles  A.  Sackett,  James  H.  Herrman,  John  R.  Hegeman, 
Francis  M.  Leake,  Wm.  G.  Ross,  Clermont  H.  Wilcox,  Alex.  P.  W.  Kinnan,  Fred- 
erick H.  Ecker,  William  C.  Lane,  Abram  C.  DeGraw,  John  F.  Thomson,  Edgar 
A.  Tredwell,  William  R.  Innis,  George  Hadden,  Willard  E.  Edmister,  Frederic 
C.  Meacham,  Malcolm  B.  Dutcher,  Wm.  McMaster  Mills. 


APPENDIX  61 1 

UNION  SAVINGS  BANK  OF  PATCHOGUE,  PATCHOGUE 

(Ocean  Avenue  and  Church  Street;  incorporated  1896) 
Joseph  Bailey,  President  Walter  S.  Rose,  Secretary 

TRUSTEES: 
Walter  H.  Jaycox,  Joseph  Bailey,  Emerson  G.  Terrell,  Arthur  H.Terry,  Nelson 
McBride,  Milton  G.  Wiggins,  Alden  J.  Woodruff,  Gelston  G.  Roe,  George  B. 
Howell,  William  A.  Hulse,  Josiah  Robbins,  Charles  E.  Rose,  Winfield  S.  Ben- 
nett, John  T.  Dare,  Charles  W.  Avery,  Ralph  Dayton,  E.  Eugene  Hawkins, 
Francis  Gerber,  Jacob  Ockers,  Julius  Hauser,  Robt.  S.  Pelletreau,  H.  Clay  Losee, 
Riley  P.  Howell,  Walter  S.  Rose. 

UNION  SQUARE  SAVINGS  BANK,  NEW  YORK  CITY 

(20  Union  Square;  incorporated  1848) 
William  H.  Rockwood,  President  Henry  R.  Brinckerhoff,  Secretary 

TRUSTEES: 
E.  L.  Winthrop,  Hewlett  Scudder,  W.  Emlen  Roosevelt,  Chas.  G.  Thompson, 
Frederic  S.  Wells,  Albert  M.  Patterson,  Wm.  DeF.  Haynes,  Isaac  Townsend, 
Samuel  Woolverton,  Frank  B.  Keech,  Bronson  Winthrop,  Edward  M,  Town- 
send,  Lorin  K.  Scudder,  Wm.  H.  Rockwood,  Newbold  T.  Lawrence. 

UNITED  STATES  SAVINGS  BANK  OF  THE  CITY  OF  NEW  YORK 

(606  Madison  Avenue;  incorporated  1889) 
Chas.  N.  Taintor,  President  John  Hyslop,  Treasurer 

TRUSTEES: 
Richard  A.  Anthony,  Payson  Merrill,  Noah  C.  Rogers,  John  Hyslop,  Alfred  E. 
Marling,  Charles  N.  Taintor,  John  P.  Munn,  James  A.  Frame,  Edward  I.  Devlin, 
Edward  H.  Landon,  Wm.  C.  Adams,  William  E.  Peck,  Francis  G.  Lloyd,  W. 
Willis  Reese,  N.  C.  Fisher,  Edwin  J.  Gillies,  John  E.  Weeks,  Adolphe  F.  Le  Gost, 
Isaac  N.  Seligman,  Langley  W.  Wiggin. 

♦UNIVERSAL  SAVINGS  BANK,  NEW  YORK  CITY 

(149  Broadway;  incorporated  1907) 
Wilbur  F.  Brown,  President  Wilbur  F.  Brown,  Jr.,  Treasurer 

TRUSTEES: 
Wilbur  F.  Brown,  Robert  McLean,  C.  L.  Mitchell,  Byron  W.  Greene,  Wilbur 
F.  Brown,  Jr.,  Robert  Mazet,  Fancher  Nicoll,  Russell  Dart,  Samuel  D.  Folsom, 
Frank  H.  Hines,  Courtney  Hyde,  August  H.  Tiemeyer,  Blair  S.  Williams,  Will- 
iam M.  Morgan,  Richard  C.  Corner,  Robert  C.  Hill,  Charles  J.  Austin,  Sam.  R. 
Outerbridge,  Grover  A.  Whalen. 

WALDEN  SAVINGS  BANK,  WALDEN 

(Corner  Ulster  Avenue  and  Bank  Street;  incorporated  1872) 
Hiram  B.  Wooster,  President  Charles  W.  Sadlier,  Treasurer 

TRUSTEES: 
T.  L.  Millspaugh,  Hiram  B.  Wooster,  Albert  S.  Embler,  Simon  Vernooy,  Ehas 
Mulford,  Edward  Whitehead,  Charles  W.  Sadlier,  R.  A.  Demarest,  C.  Fred 
Fowler,  Harvey  N.  Smith,  Samuel  Andrews,  John  Simpson,  George  N.  Stoddard. 


*Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


6i2  APPENDIX 

WAPPINGER  SAVINGS  BANK,  WAPPINGER  FALLS 

(2  Mill  Street;  incorporated  1869) 
James  R.  Barlow,  President  William  A.  Brewster,  Treasurer 

TRUSTEES: 
John  H.  Dakin,  Wm.  A.  Brewster,  William  K.  Roy,  James  R.  Barlow,  J.  Wick- 
off  Cornell,  John  H.  Wixson,  George  H.  Angell,  Charles  T.  Jones,  Thomas  J. 
Cashin,  WilUam  J.  Workman,  I.  T.  N.  Harcourt,  G.  A.  Cunningham,  R.  H. 
Breed. 

WARWICK  SAVINGS  BANK,  WARWICK 

(12  Main  Street;  incorporated  1875) 

John  Sayer,  President  Joseph  E.  V.  Miller,  Treasurer 

TRUSTEES: 
John  Sayer,  Jos.  E.  V.  MiUer,  Thomas  WeUing,  Wilbur  C.  Lazear,  Benj.  F. 
Vail,  Henry  Pelton,  John  W.  Sanford,  Joel  H.  Crissey,  CUfford  S.  Beattie,  John 
B.  Bradner,  Fred.  C.  Cary,  W.  B.  Van  Devoort,  Morris  Rutherford. 

WATERTOWN  SAVINGS  BANK,  WATERTOWN 

(125  Washington  Street;  incorporated  1893) 
Isaac  L.  Hunt,  President  Harvey  W.  Steele,  Treasurer 

TRUSTEES: 
Allen  C.  Beach,  John  R.  Pawling,  Fred.  George,  George  H.  Babcock,  Silas  L. 
George,  H.  W.  Steele,  Herbert  E.  Harmon,  W.  W.  Conde,  H.  P.  Dunlap,  Charles 

D.  Bingham,  Andrew  C.  Comwell,  George  J.  Dryden,  Lorenzo  Smith,  Isaac  L. 
Hunt,  Antonio  F.  Mills,  Ira  Sharp,  Adam  Bickelhaupt,  Eli  B.  Johnson. 

♦WESTCHESTER  COUNTY  SAVINGS  BANK,  TARRYTOWN 

(Broadway  and  Main  Street;  incorporated  1853) 
Isaac  Requa,  President  Elmore  T.  Willsea,  Treastirer 

TRUSTEES: 
Richard  B.  Coutant,  Moses  W.  Taylor,  David  Silver,  Eugene  Barnes,  Isaac 
Requa,  Frank  V.  Millard,  Elmore  T.  Willsea,  Chas.  E.  Eddison,  Joseph  Blouin, 
B.  F.  Tompkins,  Frederic  G.  Le  Roy,  Charles  F.  Smith,  Wm.  A.  Bumham. 

WESTERN  SAVINGS  BANK,  BUFFALO 

(438  Main  Street;  incorporated  185 1) 
Albert  J.  Wheeler,  President  Franklin  W.  H.  Becker,  Secretary 

TRUSTEES: 
Henry  Erb,  Henry  Zipp,  Albert  J.  Wheeler,  Howard  H.  Baker,  Charles  Die- 
bold,  Jr.,  Henry  E.  Boiler,  William  F.  Wendt,  F.  W.  H.  Becker,  Wilham  Simon, 
Lewis  J.  Heintz,  Carl  A.  Strangmann,  Chas.  H.  Donaldson,  Daniel  Good,  Edw. 

E.  Coatsworth. 

WEST  SIDE  SAVINGS  BANK,  NEW  YORK  CITY 

(110-112  Sixth  Avenue;  incorporated  1868) 
Clarence  O.  Bigelow,  President  Wm.  V.  Hudson,  Secretary 

TRUSTEES: 
Clarence  O.  Bigelow,  Walter  V.  Bishop,  John  J.  Brogan,  John  C.  Carpenter, 
Charles  E.  Duross,  Edward  R.  Finch,  Frank  L.  Frugone,  Robert  L.  Harrison, 
James  B.  Horner,  John  W.  Jacobus,  George  E.  Marks,  Arthur  J.  McClure, 
Joseph  Rowan,  F.  L.  Satterlee,  Peter  J.  L.  Searing,  Thomas  F.  Somers,  Chas.  H. 
Van  Aken,  W.  I.  Lincoln  Adams,  V.  Chapin  Daggett,  Joseph  H.  Emery,  N.  S. 
Westcott. 

'Those  marked  with  asterisk  not  members  of  the  Savings  Banks  Association  of  the  State  of 
New  York. 


APPENDIX  613 

WILLIAMSBURGH  SAVINGS  BANK,  BROOKLYN 

(175  Broadway;  incorporated  185 1) 
Andrew  D.  Baird,  President  Charles  J.  Pasfield,  Cashier 

TRUSTEES: 
Ezra  B.  Tuttle,  Brainard  G.  Latimer,  Andrew  D.  Baird,  Samuel  M.  Meeker, 
James  H.  Post,  Jas.  F.  Bendernagel,  Edward  T.  Horwill,  Alfred  Romer,  Welding 
Ring,  Herbert  F.  Gunnison,  Francis  W.  Young,  Paul  E.  Bonner,  Edward  E. 
Pearce,  Albert  S.  Richey,  Ralph  H.  Tiebout,  John  V.  Jewell. 

YONKERS  SAVINGS  BANK,  YONKERS 

(16  and  18  South  Broadway;  incorporated  1854) 
James  H.  Weller,  President  Charles  F.  Hulbert,  Treasurer 

TRUSTEES: 
S.  Francis  Quick,  Wm.  H.  Thorne,  James  H.  Weller,  R.  Eickemeyer,  Albert  L, 
Skinner,  Harry  L.  Twine,  John  O.  Campbell,  Charles  F.  Hulbert,  Benj.  W.  Stil- 
well,  Wm.  M.  Dick,  John  Bellows,  Wm.  W.  Scrugham,  Eugene  C.  Clark,  L.  J. 
Schlesinger,  Joseph  H,  Beall,  Charles  H.  Ketcham,  N.  A.  Warren. 


MEMBERS  OF 

THE  SAVINGS  BANKS  ASSOCIATION  OF  THE 

STATE  OF  NEW  YORK 

BY   GROUPS 

Group  i 

American  Savings  Bank Buffalo 

Erie  County  Savings  Bank Buffalo 

Western  Savings  Bank Buffalo 

East  Side  Savings  Bank Rochester 

Mechanics'  Savings  Bank Rochester 

Monroe  County  Savings  Bank Rochester 

Rochester  Savings  Bank Rochester 

Niagara  County  Savings  Bank  Niagara  Falls 

Seneca  Falls  Savings  Bank Seneca  Falls 

Group  2 

Auburn  Savings  Bank ,.      .      .      .       Auburn 

Cayuga  County  Savings  Bank Auburn 

Ithaca  Savings  Bank Ithaca 

Elmira  Savings  Bank Elmira 

Binghamton  Savings  Bank Binghamton 

Cortland  Savings  Bank Cortland 

Onondaga  Savings  Bank         SjTacuse 

Syracuse  Savings  Bank Syracuse 

Skanea teles  Savings  Bank Skaneateles 

Fulton  Savings  Bank         Fulton 

Oswego  City  Savings  Bank Oswego 

Oswego  County  Savings  Bank Oswego 

Jefferson  County  Savings  Bank         Watertown 

Watertown  Savings  Bank Watertown 

Rome  Savings  Bank Rome 

Oneida  County  Savings  Bank Rome 

Savings  Bank  of  Utica Utica 

Oneida  Savings  Bank Oneida 

Geneva  Savings  Bank .  Geneva 

Group  3 

Albany  Savings  Bank Albany 

Albany  City  Savings  Institution Albany 

Albany  County  Savings  Bank Albany 

Albany  Exchange  Savings  Bank Albany 

Home  Savings  Bank  Albany 

614 


APPENDIX  6is 

National  Savings  Bank Albany 

Mechanics'  and  Farmers'  Savings  Bank Albany 

Cohoes  Savings  Institution Cohoes 

Mechanics'  Savings  Bank Cohoes 

Amsterdam  Savings  Bank Amsterdam 

Goshen  Savings  Bank Goshen 

Middletown  Savings  Bank Middletown 

Walden  Savings  Bank Walden 

Warwick  Savings  Bank Warwick 

Ellenville  Saving  Bank Ellenville 

New  Paltz  Savings  Bank New  Paltz 

Kingston  Savings  Bank Kingston 

Rondout  Savings  Bank Kingston 

Ulster  County  Savings  Bank Kingston 

Catskill  Savings  Bank Catskill 

Schenectady  Savings  Bank Schenectady 

Matteawan  Savings  Bank Beacon 

Mechanics'  Savings  Bank Beacon 

Pawling  Savings  Bank Pawling 

Poughkeepsie  Savings  Bank        Poughkeepsie 

Rhinebeck  Savings  Bank .     Rhinebeck 

Wappinger  Savings  Bank Wappinger  Falls 

Putnam  County  Savings  Bank Brewster 

Hudson  City  Savings  Institution Hudson 

Troy  Savings  Bank Troy 

Newburgh  Savings  Bank Newburgh 

Group  4 

American  Savings  Bank New  York  City 

Bank  for  Savings         New  York  City 

Bowery  Savings  Bank New  York  City 

Broadway  Savings  Institution  New  York  City 

Bronx  Savings  Bank New  York  City 

Citizens'  Savings  Bank New  York  City 

Commonwealth  Savings  Bank  New  York  City 

Dollar  Savings  Bank New  York  City 

Maiden  Lane  Savings  Bank New  York  City 

Dry  Dock  Savings  Institution New  York  City 

East  River  Savings  Bank New  York  City 

Emigrant  Industrial  Savings  Bank New  York  City 

Empire  City  Savings  Bank New  York  City 

Excelsior  Savings  Bank New  York  City 

Franklin  Savings  Bank New  York  City 

German  Savings  Bank New  York  City 

Greenwich  Savings  Bank New  York  City 

Harlem  Savings  Bank New  York  City 

Irving  Savings  Institution New  York  City 

Italian  Savings  Bank         New  York  City 

Manhattan  Savings  Bank New  York  City 

Metropolitan  Savings  Bank New  York  City 

New  York  Savings  Bank New  York  City 

North  River  Savings  Bank New  York  City 

North  Side  Savings  Bank New  York  City 

Seamen's  Bank  for  Savings New  York  City 

Union  Dime  Savings  Bank New  York  City 

Union  Square  Savings  Bank New  York  City 

United  States  Savings  Bank New  York  City 


6i6  APPENDIX 

West  Side  Savings  Bank         New  York  City 

Bank  for  Savings         Ossining 

Greenburgh  Savings  Bank Dobbs  Ferry 

Home  Savings  Bank  White  Plains 

Peekskill  Savings  Bank Peekskill 

People's  Savings  Bank Yonkers 

Port  Chester  Savings  Bank  Port  Chester 

Union  Savings  Bank  of  Westchester  Co Mamaroneck 

Yonkers  Savings  Bank Yonkers 

Group  s 

Brevoort  Savings  Bank Brooklyn 

Brooklyn  Savings  Bank Brooklyn 

Bushwick  Savings  Bank Brooklyn 

City  Savings  Bank Brooklyn 

Dime  Savings  Bank  of  Williamsburgh Brooklyn 

Dime  Savings  Bank  of  Brooklyn Brooklyn 

East  Brooklyn  Savings  Bank  - Brooklyn 

Eastern  District  Savings  Bank  Brooklyn 

East  New  York  Savings  Bank Brooklyn 

Germania  Savings  Bank Brooklyn 

German  Savings  Bank Brooklyn 

Greater  New  York  Savings  Bank Brooklyn 

Green  Point  Savings  Bank Brooklyn 

Home  Savings  Bank  Brooklyn 

Kings  County  Savings  Bank Brooklyn 

Prudential  Savings  Bank Brooklyn 

South  Brooklyn  Savings  Bank Brooklyn 

Sumner  Savings  Bank Brooklyn 

Williamsburgh  Savings  Bank Brooklyn 

College  Point  Savings  Bank         . College  Point 

Long  Island  City  Savings  Bank        Long  Island  City 

Queens  County  Savings  Bank Flushing 

Riverhead  Savings  Bank Riverhead 

Sag  Harbor  Savings  Bank Sag  Harbor 

Southold  Savings  Bank Southhold 

Union  Savings  Bank Patchogue 

Roslyn  Savings  Bank Roslyn 

Richmond  County  Savings  Bank West  New  Brighton 

Staten  Island  Savings  Bank         . Stapleton 

Jamaica  Savings  Bank Jamaica 


D 

OFFICERS  OF 

THE  SAVINGS  BANKS  ASSOCIATION  OF  THE 

STATE  OF  NEW  YORK 

1894-1914 

(inclusive) 


I 894-1 89s 


President 


Executive  Committee 


John  Harsen  Rhoades 
President,   Greenwich   Savings  Bank 


First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 


Chairman  Executive  Committee 

Wm.  C.  Sturges 

President,  Seamen's  Bank  for  Savings 

Treasurer 

Andrew  Mills 

Trustee,  Dry  Dock  Savings  Bank 

Secretary 

Wm.  G.  Conklin 

Secretary,  Franklin  Savings  Bank 


Wm.  C.  Sturges 

President,  Seamen's  Bank  for  Savings 

J.  Howard  King 

President,  Albany  Savings  Bank 

Edward  C.  Dawson 

President,  Onondaga  Savings  Bank 

A.  C.  Miller 

Treasurer,  Utica  Savings  Bank 

Samuel  R.  Rainey 

Secretary  and  Treasurer,  Hudson  City 

Savings  Institution 

Members,  Ex-Officio 

John  Harsen  Rhoades 

President,  Greenwich  Savings  Bank 

Andrew  Mills 

Dry  Dock  Savings  Bank 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Banks 

Wm.  G.  Conklin 

Secretary,  Franklin  Savings  Bank 


1895-1896 
President  Chairman  Executive  Committee 

John  Harsen  Rhoades  Wm.  C.  Sturges 

President,  Greenwich  Savings  Bank       President,  Seamen's  Bank  for  Savings 


First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 


Treasurer 

Andrew  Mills 

President,  Dry  Dock  Savings  Bank 


617 


6i8 


APPENDIX 


1895-1896 — Continued 
Secretary  David  Hoyt 

Wm.  G.  Conklin  Secretaty,  Monroe  County  Savings 

Secretary,  Franklin  Savings  Bank  Ba.nk 


Executive  Committee 

William  C.  Sturges 

President,  Seamen's  Bank  for  Savings 

Edward  S.  Dawson 

President,  Onondaga  County 

Savings  Bank 

Samitel  R.  Rainey 

Secretary  and  Treasurer,  Hudson  City 

Savings  Institution 

James  M.  Wentz 

Vice-President,  Newburgh  Savings 

Bank 

J.  Howard  King 

President,  Albany  Savings  Bank 

Bryan  H.  Smith 
President,  Brooklyn  Savings  Bank 

John  P.  Townsend 

President,  Bowery  Savings  Bank 

Robert  S.  Donaldson 

Secretary,  Erie  County  Savings  Bank 


Members,  Ex-Officio 

John  Harsen  Rho.^des 

President,  Greenwich  Savings  Bank 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Andrew  Mills 

President,  Dry  Dock  Savings  Bank 

Wm.  G.  Conklin 
Secretary,  Franklin  Savings  Bank 

Nominating  Committee 

Charles  E.  Sprague 

President,  Union  Dime  Savings  Bank 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

Benjamin  H.  Huntington 

President,  Dime  Savings  Bank  of 

Brooklyn 


1896-1897 


President 

John  Harsen  Rhoades 

President,  Greenwich  Savings  Bank 

First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Treasurer 

Andrew  Mills 

President,  Dry  Dock  Savings  Bank 

Secretary 

Wm.  G.  Conklin 

Secretary,  Franklin  Savings  Bank 

Executive  Committee 

William  C.  Sturges 

President,  Seamen's  Bank  for  Savings 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Samuel  R.  Rainey 

Secretary  and  Treasurer,  Hudson  City 

Savings  Institution 


James  M.  Wentz 

Vice-President,  Newburgh  Savings 

Bank 

J.  Howard  King 

President,  Albany  Savings  Bank 

Bryan  H.  Smith 
President,  Brooklyn  Savings  Bank 

John  P.  Townsend 

President,  Bowery  Savings  Bank 

Robert  S.  Donaldson 

Secretary,  Erie  County  Savings  Bank 

Alexander  E.  Orr 

President,  South  Brooklyn  Savings 

Bank 


Members,  Ex-Officio 

John  Harsen  Rhoades 

President,  Greenwich  Savings  Bank 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Andrew  Mills 

President,  Dry  Dock  Savings  Bank 

Wm.  G.  Conklin 

Secretary,  Franklin  Savings  Bank 


APPENDIX 


619 


1 896-1 897 — Continued 

Nominating  Committee 

Samuel  D.  Styles,  President,  North  River  Savings  Bank 

J.  B.  CuRREY,  Secretary,  Metropolitan  Savings  Bank 

Henry  Geckler,  Secretary,  Dime  Savings  Bank  of  Williamsburgh 


1897-1J 


President 


John  Harsen  Rhoades 
President,  Greenwich  Savings  Bank 


First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Treasurer 

Andrew  Mills 

President,  Dry  Dock  Savings  Bank 

Secretary 

Wm.  G.  Conklin 

Secretary,  Franklin  Savings  Bank 

Executive  Committee 

Samuel  R.  Rainey 

Secretary  and  Treasurer,  Hudson  City 

Savings  Institution 

William  C.  Sturges 

President,  Seaman's  Bank  for  Savings 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

James  M.  Wentz 

Vice-President,  Newburgh  Savings 

Bank 


J.  Howard  King 
President,  Albany  Savings  Bank 

Bryan  H.  Smith 
President,  Brooklyn  Savings  Bank 

John  P.  Townsend 

President,  Bowery  Savings  Bank 

Robert  S.  Donaldson 

Secretary,  Erie  County  Savings  Bank 

Alexander  E.  Orr 

President,  South  Brooklyn  Savings 

Bank 

Members,  Ex-Officio 

John  Harsen  Rhoades 

President,  Greenwich  Savings  Bank 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Andrew  Mills 

President,  Dry  Dock  Savings  Bank 

Wm.  G.  Conklin 
Secretary,  Franklin  Savings  Bank 

Nominating  Committee 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

J.  B.  CURREY 

Secretary,  Metropolitan  Savings  Bank 

Henry  Geckler 

Secretary,  Dime  Savings  Bank  of 

Williamsburgh 


I 898-1899 
President 
John  Harsen  Rhoades 
President,  Greenwich  Savings  Bank 


Secretary 

Wm.  G.  Conklin 

Secretary,  Franklin  Savings  Bank 


First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Treasurer 
Andrew  Mills 


Executive  Committee 

Samuel  R.  Rainey 

Secretary  and  Treasurer,  Hudson  City 

Savings  Institution 

William  C.  Sturges 

President,  Dry  Dock  Savings  Bank        President,  Seamen's  Bank  for  Savings 


620 


APPENDIX 


1 898-1 899 — Contiinted 


Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

James  M.  Wentz 

Vice-President,  Newburgh  Savings 

Bank 

J.  Howard  King 
President,  Albany  Savings  Bank 

Bryan  H.  Smith 
President,  Brooklyn  Savings  Bank 

John  P.  Townsend 
President,  Bowery  Savings  Bank 

Robert  S.  Donaldson 

Secretary,   Erie   County   Savings 

Bank 

Alexander  E.  Orr 

President,  South  Brooklyn  Savings 

Bank 


Members,  Ex-Officio 

John  Harsen  Rhoades 

President,  Greenwich  Savings  Bank 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Andrew  Mills 

President,  Dry  Dock  Savings  Bank 

Wm.  G.  Conklin 
Secretary,  Franklin  Savings  Bank 

Nominating  Committee 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

J.  B.  CURREY 

Secretary,  Metropolitan  Savings  Bank 

Henry  Geckler 

Secretary,  Dime  Savings  Bank  of 

Williamsburgh 


I 899-1 900 


President 


John  Harsen  Rhoades 
President,  Greenwich  Savings  Bank 

First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Treasurer 

Andrew  Mills 

President,  Dry  Dock  Savings  Bank 

Secretary 

VVm.  G.  Conklin 

Secretary,  Franklin  Savings  Bank 

Executive  Committee 

Samuel  R.  Rainey 

Secretary  and  Treasurer,  Hudson  City 

Savings  Institution 

William  C.  Sturges 

President,  Seamen's  Bank  for  Savings 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

James  M.  Wentz 

Vice-President,  Newburgh  Savings 

Bank 

J.  Howard  King 

President,  Albany  Savings  Bank 


Bryan  H.  Smith 
President,  Brooklyn  Savings  Bank 

John  D.  Hicks 

President,  Bowery  Savings  Bank 

Robert  S.  Donaldson 

Secretary,  Erie  County  Savings  Bank 

Alexander  E.  Orr 

President,  South  Brooklyn  Savings 

Bank 


Members,  Ex-Officio 

John  Harsen  Rhoades 

President,  Greenwich  Savings  Bank 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Andrew  Mills 

President,  Dry  Dock  Savings  Bank 

Wm.  G.  Conklin 

Secretary,  Franklin  Savings  Bank 


Nominating  Committee 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

J.  B.  CuRREY 

President,  Metropolitan  Savings  Bank 

Henry  Geckler 

Secretary,  Dime  Savings  Bank  of 

Williamsburgh 


APPENDIX 


621 


1900-1901 


President 

Andrew  Mills 

President,  Dry  Dock  Savings  Bank 

First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Second  Vice-President 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Third  Vice-President 

Charles  E.  Han.vuan 

President,  Troy  Savings  Bank 

Secretary 

William  G.  Conklin 

Secretary,  Franklin  Savings  Bank 

Treasurer 

Jonathan  B.  Currey 

President,  Metropolitan  Savings  Bank 

Executive  Committee 
John  Harsen  Rho.\des 
President,  Greenwich  Savings  Bank 

William  C.  Sturges 
President,  Seamen's  Bank  for  Savings 

James  M.  Wentz 

Vice-President,  Newburgh  Savings 

Bank 

J.  Howard  King 

President,  Albany  Savings  Bank 

Bryan  H.  Smith 
President,  Brooklyn  Savings  Bank 


John  D.  Hicks 

President,  Bowery  Savings  Bank 

Robert  S.  Donaldson 

Secretary,  Erie  County  Savings  Bank 

Alexander  E.  Orr 

President,  South  Brooklyn  Savings 

Bank 

David  Hoyt 

Secretary,  Monroe  County  Savings 

Bank 

Members,  Ex-Officio 

Andrew  Mills 

President,  T>ry  Dock  Savings 

Institution 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

William  G.  Conklin 

The  Franklin  Savings  Bank 

Jonathan  B.  Currey 

President,  Metropolitan  Savings  Bank 

Nominating  Committee 

Henry  Geckler 

Secretarj',  Dime  Savings  Bank  of 

Williamsburgh 

B.  H.  Huntington 

President,  Dime  Savings  Bank  of 

Brooklyn 

Frank  M.  Hurlbut 

President,  Institution  for  the  Savings 

of  Merchants'  Clerks 


1901-1902 


President 

Andrew  Mills 

President,  Dry  Dock  Savings 

Institution 

First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Second  Vice-President 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 


Third  Vice-President 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

Secretary 

William  G.  Conklin 

Secretary,  Franklin  Savings  Bank 

Treasurer 

Jonathan  B.  Currey 

President,  Metropolitan  Savings  Bank 


622 


APPENDIX 


1901-1902- 

Executive  Committee 

John  Harsen  Rhoades 

President,  Greenwich  Savings 

Bank 

William  C.  Stitrges 

President,  Seamen's  Bank  for 

Savings 

James  M.  Wentz 
President,  Newburgh  Savings  Bank 

Wm.  B.  Van  Rensselaer' 
President,  Albany  Savings  Bank 

Bryan  H.  Smith 
President,  Brooklyn  Savings  Bank 

John  D.  Hicks 
President,  Bowery  Savings  Bank 

Robert  S.  Donaldson 

Secretary,   Erie   County   Savings 

Bank 

Alexander  E.  Orr 

President,  South  Brooklyn  Savings 

Bank 

David  Hoyt 

Secretary,  Monroe  County  Savings 

Bank 


-Continued 

Members,  Ex-Officio 

Andrew  Mills 

President,  Dry  Dock  Savings 

Institution 

James  Mc.  Mahon 

President,  Emigrant  Industrial 

Savings  Bank 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

William  G.  Conklin 

Secretary,  Franklin  Savings  Bank 

Jonathan  B.  Currey 

President,  MetropoUtan  Savings  Bank 

Nominating  Committee 

B.  H.  Huntington 

President,  Dime  Savings  Bank  of 

Brooklyn 

Frank  M.  Hurlbut 

President,  Institution  for  the  Savings 

of  Merchants'  Clerks 

J.  V.  Meserole 

President,Williamsburgh  Savings  Bank 


1902-1903 


President 

Chas.  a.  Schieren 

Germania  Savings  Bank 

First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Second  Vice-President 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Third  Vice-President 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

Secretary 

Wm.  G.  Conklin 

Secretary,  Franklin  Savings  Bank 

Treasurer 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 


Executive  Committee 

William  C.  Sturges 

President,  Seamen's  Bank  for  Savings 

James  M.  Wentz 
President,  Newburgh  Savings  Bank 

Wm.  B.  Van  Rensselaer 
President,  Albany  Savings  Bank 

Bryan  H.  Smith 
President,  Brooklyn  Savings  Bank 

John  D.  Hicks 
President,  Bowery  Savings  Bank 

Robert  S.  Donaldson 
Secretary,  Erie  County  Savings  Bank 

Alexander  E.  Orr 

President,  South  Brooklyn  Savings 

Bank 

David  Hoyt 

Secretary,  Monroe  County  Savings 

Bank 

Charles  E.  Sprague 

President,  Union  Dime  Savings 

Institution 


APPENDIX 


623 


1902-1903 — Continued 


Members,  Ex-Officio 

Chas.  a.  Schieren 

President,  Germania  Savings  Bank 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

William  G.  Conklin 

Secretary,  Franklin  Savings  Bank 


Samuel  D.  Styles 
President,  North  River  Savings  Bank 


Nominating  Committee 

William  Felsinger 

President,  New  York  Savings  Bank 

Chas.  A.  Miller 

Vice-President,  The  Savings  Bank  of 

Utica 

D.  C.  Smith 

Vice-President,    Mechanics'    Savings 

Bank  of  Fishkill 


1903-1904 


President 

Chas.  A.  Schieren 

President,  Germania  Savings  Bank 

First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Second  Vice-President 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Third  Vice-President 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

Secretary 

William  G.  Conklin 

Secretary,  The  Franklin  Savings  Bank 

Treasurer 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

Executive  Committee 

For  One  Year 

Alexander  E.  Orr 

President,  South  Brooklyn  Savings 

Bank 

Charles  E.  Sprague 

President,  Union  Dime  Savings 

Institution 

David  Hoyt 

Secretary,  Monroe  County  Savings 

Bank 

For  Two  Years 

James  M.  Wentz 

President,  Newburgh  Savings  Bank 


Robert  S.  Donaldson 

Secretary,  Erie  County  Savings 

Bank 

Wm.  B.  Van  Rensselaer 

President,  Albany  Savings  Bank 

For  Three  Years 

John  Harsen  Rhoades 

President,  Greenwich  Savings  Bank 

William  C.  Sturges 

President,  Seamen's  Bank  for  Savings 

Wm.  H.  S.  Wood 

President,  Bowery  Savings  Bank 

Members,  Ex-Officio 

Charles  A.  Schieren 

President,  Germania  Savings  Bank 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

William  G.  Conklin 

Secretary,  The  FrankUn  Savings  Bank 

Samuel  D.  Styles 
President,  North  River  Savings  Bank 

Nominating  Committee 

William  Felsinger 

President,  New  York  Savings  Bank 

Charles  A.  Miller 

Vice-President,  The  Savings  Bank  of 

Utica 

John  T.  Smith 

President,  Mechanics'  Savings  Bank, 

Fishkill-on-the-Hudson 


624 


APPENDIX 


I 904-1905 


President 


For  Three  Years 


Wm.  B.  Van  Rensselaer 
President,  Albany  Savings  Bank 

First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Second  Vice-President 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Third  Vice-President 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

Secretary 

William  G.  Conklin 

Secretary,  The  Franklin  Savings  Bank 

Treasurer 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

Executive  Committee 

For  One  Year 

James  M.  Wentz 

President,  Newburgh  Savings  Bank 

Robert  S.  Donaldson 
Secretar}',  Erie  County  Savings  Bank 

For  Two  Years 

John  Harsen  Rhoades 

President,  Greenwich  Savings  Bank 

VVilll\m  C.  Sturges 

President,  Seamen's  Savings  Bank 

Wm.  H.  S.  Wood 

President,  Bowery  Savings  Bank 


Alexander  E.  Orr 

President,  South  Brooklyn  Savings 

Bank 

Charles  E.  Sprague 

President,  Union  Dime  Savings 

Institution 

Daved  Hoyt 

Secretarj",  Monroe  County  Savings 

Bank 


Members,  Ex-Officio 

Wm.  B.  Van  Rensselaer 

President,  Albany  Savings  Bank 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

William  G.  Conklin 

Secretary,  The  Franklin  Savings  Bank 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

Andrew  Mills 

President,  Drj'  Dock  Savings  Bank 

Chas.  a.  Schieren 
President,  Germania  Savings  Bank 

Nominating  Committee 

William  Felsinger 

President,  New  York  Savings  Bank 

Ckas.  a.  Miller 

Vice-President,  The  Savings  Bank  of 

Utica 

John  T.  Smith 

President,  Mechanics'  Savings  Bank, 

Fishkill-on-the-Hudson 


I 905-1 906 


President 

Wm.  B.  Van  Rensselaer 

President,  Albany  Savings  Bank 

First  Vice-President 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 


Second  Vice-President 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Third  Vice-President 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 


APPENDIX 


625 


1 905- 1 906 — Continued 


Secretary 

William  G.  Conklin 

Secretary,  The  Franklin  Savings  Bank 

Treasurer 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

Executive  Committee 

For  Otie  Year 

John  Harsen  Rhoades 

President,  Greenwich  Savings  Bank 

William  C.  Sturges 

President,  Seamen's  Bank  for  Savings 

Wm.  H.  S.  Wood 

President,  Bowery  Savings  Bank 

For  Two  Years 

Alexander  E.  Orr 

President,  South  Brooklyn  Savings 

Institution 

Charles  E.  Sprague 

President,  Union  Dime  Savings 

Institution 

David  Hoyt 

Secretary,  Monroe  County  Savings 

Institution 

For  Three  Years 

Robert  S.  Donaldson 

Treasurer,  Erie  County  Savings  Bank 

Charles  A.  Miller 

Vice-President,  The  Savings  Bank  of 

Utica 


Thomas  F.  Balfe 
Treasurer,  Newburgh  Savings  Bank 

Members,  Ex-Officio 

Wm.  B.  Van  Rensselaer 

President,  Albany  Savings  Bank 

James  McMahon 

President,  Emigrant  Industrial 

Savings  Bank 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

William  G.  Conklin 

Secretary,  The  Franklin  Savings  Bank 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

Andrew  Mills 

President,  Dry  Dock  Savings 

Institution 

Chas.  a.  Schieren 

President,  Germania  Savings  Bank 

Nominating  Committee 

John  T.  Smith 

President,  Mechanics'  Savings  Bank, 

Fishkill-on-the-Hudson 

Henry  Hasler 

President,  Citizens'  Savings  Bank 

S.  Mitchell  Rainey 

Treasurer,  Hudson  City  Savings 

Institution 


1906-1907 
President  Secretary 

William  B.  Van  Rensselaer  William  G.  Conklin 

President,  Albany  Savings  Bank  Secretary,  The  Franklin  Savings  Bank 


First  Vice-President 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 

Second  Vice-President 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

Third  Vice-President 

Thomas  M.  Mulry 

President,  Emigrant  Industrial 

Savings  Bank 


Treasurer 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

Executive  Committee 

For  One  Year 

Alexander  E.  Orr 

Trustee,  South  Brooklyn  Savings 

Bank 

Charles  E.  Sprague 

President,  Union  Dime  Savings 

Institution 


626 


APPENDIX 


I 906- 1907- 
David  Hoyt 
Secretary,  Monroe  County  Savings 
Bank 

For  Two  Years 

Robert  S.  Donaldson 

Treasurer,  Erie  County  Savings  Bank 

Chaexes  a.  Miller 

Vice-President,  The  Savings  Bank  of 

Utica 

Thomas  F.  Balfe 

Treasurer,  Newburgh  Savings  Bank 

For  Three  Years 

William  C.  Stueges 

President,  Seamen's  Bank  for  Savings 

Wm.  H.  S.  Wood 

President,  Bowery  Savings  Bank 

William  Felsinger 

President,  New  York  Savings  Bank 

Members,  Ex-Officio 

Wm.  B.  Van  Rensselaer 

President,  Albany  Savings  Bank 

Edward  S.  Dawson 

President,  Onondaga  County  Savings 

Bank 


-Contimted 

Charles  E.  Hanaman 
President,  Troy  Savings  Bank 

Thomas  M.  Mulry 

President,  Emigrant  Industrial 

Savings  Bank 

William  G.  Conklin 

Secretary,  The  Franklin  Savings  Bank 

Samuel  D.  Styles 
President,  North  River  Savings  Bank 

John  Harsen  Rhoades 

President,  Greenwich  Savings  Bank 

Andrew  Mills 

President,  Dry  Dock  Savings 

Institution 

Charles  A.  Schieren 

President,  Germania  Savings  Bank 

Nominating  Committee 

John  T.  Smith 

President,  Mechanics'  Savings  Bank, 

Fishkill-on-the-Hudson 

Henry  Hasler 

President,  Citizens'  Savings  Bank 

S.  Mitchell  Ralney 

Treasurer,  Hudson  City  Savings 

Institution 


1907-1908 


President 


William  B.  Van  Rensselaer 
President,  Albany  Savings  Bank 

First  Vice-President 

Walter  Trimble 

President,  Seamen's  Bank  for  Savings 

Second  Vice-President 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

Third  Vice-President 

Thomas  M.  Mulry 

President,  Emigrant  Industrial 

Savings  Bank 

Secretary 

William  G.  Conklin 

Secretary,  The  Franklin  Savings  Bank 

Treasurer 

Samxhcl  D.  Styles 

President,  North  River  Savings  Bank 


Executive  Committee 

For  One  Year 

Robert  S.  Donaldson 

Treasurer,  Erie  County  Savings  Bank 

Charles  A.  Miller 

Vice-President,  The  Savings  Bank  of 

Utica 

Thomas  F.  Balfe 

Treasurer,  Newburgh  Savings  Bank 

For  Two  Years 

J.  V.  Meserole 

President,  Williamsburgh  Savings 

Bank 

Wm.  H.  S  Wood 

President,  Bowery  Savings  Bank 

William  Felsinger 

President,  New  York  Savings  Bank 

For  Three  Years 

Wm.  J.  Coombs 

President,  South  Brooklyn  Savings 

Institution 


APPENDIX 


627 


1 90  7- 1 908 — Continued 


Charles  E.  Sprague 

President,  Union  Dime  Savings 

Institution 

David  Hoyt 

Secretary,  Monroe  County  Savings 

Bank 

Members,  Ex-Officio 

Wm.  B.  Van  Rensselaer 

President,  Albany  Savings  Bank 

Walter  Trimble 

President,  Bank  for  Savings 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

Charles  A.  Schieren 

President,  Germania  Savings  Bank 

Thomas  M.  Mulry 

President,  Emigrant  Industrial 

Savings  Bank 

I 908-1 909 
President 
Charles  A.  Miller 
Vice-President,  Savings  Bank  of  Utica 


William  G.  Conklin 

Secretary,  Franklin  Savings 

Bank 

Samuel  D.  Styles 

President,  North  River  Savings 

Bank 

Andrew  Mills 

President,  Dry  Dock  Savings 

Institution 

Nominating  Committee 

John  T.  Smith 

President,  Mechanics'  Savings  Bank, 

Fishkill-on-the-Hudson 

Henry  Hasler 

President,  Citizens'  Savings  Bank 

S.  Mitchell  Rainey 

Treasurer,  Hudson  City  Savings 

Institution 


Wm.  G.  Conklin 

President,  Franklin  Savings  Bank 

William  Felsinger 

President,  New  York  Savings  Bank 


First  Vice-President 

Walter  Trimble 

President,  Bank  for  Savings 

Second  Vice-President 

Charles  E.  Hanaman 

President,  Troy  Savings  Bank 

Third  Vice-President 

Thomas  M.  Mulry 

President,  Emigrant  Industrial 

Savings  Bank 

Secretary 

William  F.  Patterson 

Treasurer,  Dry  Dock  Savings 

Institution 

Treasurer 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

Executive  Committee 

For  One  Year 

J.  V.  Meserole 

President,  Williamsburgh  Savings 

Bank 


For  Two  Years 

Wm.  J.  Coombs 

President,  South  Brooklyn  Savings 

Institution 

Charles  E.  Sprague 

President,  Union  Dime  Savings 

Institution 

David  Hoyt 

Secretary,  Monroe  Coimty  Savings 

Bank 

For  Three  Years 

Robert  S.  Donaldson 

President,  Erie  County  Savings  Bank 

Henry  A.  Schenck 

President,  Bowery  Savings  Bank 

Thomas  F.  Balfe 

Treasurer,  Newburgh  Savings  Bank 

Members,  Ex-Officio 

Charles  A.  Miller 

Vice-President,  The  Savings  Bank  of 

Utica 

Walter  Trimble 

President,  Bank  for  Savings 

Charles  E.  Hanaman 
President,  Troy  Savings  Bank 


628 


APPENDIX 


I 908-1 909- 

Charles  a.  Schieren 

President,  Germania  Savings  Bank 

Thomas  M.  Mulry 

President,  Emigrant  Industrial 

Savings  Bank 

Samuel  D.  Styles 

President,  North  River  Savings 

Bank 

Andrew  Mills 

President,  Dry  Dock  Savings 

Institution 

W.  B.  Van  Rensselaer 

President,  Albany  Savings  Bank 


-Contitiued 

William  F.  Patterson 

Treasurer,  Dry  Dock  Savings 

Institution 

Nominating  Committee 

John  T.  Smith 

President,  Mechanics'  Savings  Bank,- 

Fishkill-on-the-Hudson 

Henry  Hasler 

President,  Citizens'  Savings  Bank 

S.  Mitchell  Rainey 

Treasurer,  Hudson  City  Savings 

Institution 


President 

Thomas  M.  Mulry 

President,  Emigrant  Industrial 

Savings  Bank 

First  Vice-President 

Walter  Trimble 

President,  Bank  for  Savings 

Second  Vice-President 

Chas.  E.  Hanaman 

President,  Troy  Savings  Bank 

Third  Vice-President 

Wm.  Felsinger 

President,  New  York  Savings  Bank 

Secretary 

Jonathan  B.  Currey 

President,  Metropolitan  Savings 

Bank 


1909-1910 


For  Two  Years 

Robert  S.  Donaldson 

President,  Erie  County  Savings 

Bank 

Henry  A.  Schenck 

President    Bowery   Savings 

Bank 

Thomas  F.  Balfe 

President,  Newburgh  Savings  Bank 

For  Three  Years 

Wm.  G.  Conklin 

President,  Franklin  Savings 

Bank 

Wm.  C.  Sturges 

President,  Dime  Savings  Bank  of 

Williamsburgh 

E.  T.  Maynard 

Comptroller,  Brooklyn  Savings 

Bank 


Treasiirer 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

Executive  Committee 

For  One  Year 

Wm.  J.  Coombs 

President,  South  Brooklyn  Savings 

Institution 

Charles  E.  Sprague 

President,  Union  Dime  Savings 

Institution 

David  Hoyt 

Secretary,  Monroe  County  Savings 

Bank 


Members,  Ex-Officio 

Thomas  M.  Mulry 

President  of  the  Association 

Chas.  E.  Hanaman 

Second  Vice-President  of  the 

Association 

Samuel  D.  Styles 

Treasurer  of  the  Association 

Andrew  Mills 

Ex-President  of  the  Association 

Chas.  A.  Miller 

Ex-President  of  the  Association 

Walter  Trimble 

First  Vice-President  of  the 

Association 


APPENDIX 


629 


1909-1 910 — Continued 


Wm.  Felsinger 

Third  Vice-President  of  the 

Association 

Chas.  a.  Schieren 

Ex-President  of  the  Association 

Wm.  B.  Van  Rensselaer 

Ex-President  of  the  Association 

Jonathan  B.  Currey 

Secretary  of  the  Association 


Nominating  Committee 

John  T.  Smith 

President,  Mechanics'  Savings  Bank 

Fishkill 

Frank  M.  Hxjrlbut 

President,  Union  Square  Savings  Bank 

S.  Mitchell  Rainey 

Treasurer,  Hudson  City  Savings 

Institution 


1910-1911 


President 

Charles  E.  Hanaman 

President,  The  Troy  Savings  Bank 

First  Vice-President 

Walter  Trimble 

President,  Bank  for  Savings, 

New  York  City 

Second  Vice-President 

William  Felsinger 

President,  New  York  Savings  Bank 

Third  Vice-President 

Robert  S.  Donaldson 

President,  Erie  County  Savings  Bank, 

Buffalo 

Secretary 

Frederic  B.  Stevens 

Treasurer,  National  Savings  Bank, 

Albany 

Treasurer 

Samuel  D.  Styles 

President,  North  River  Savings  Bank 

Executive  Committee 

For  One  Year 

Henry  A.  Schenck 

President,  Bowery  Savings  Bank 

Thomas  F.  Balfe 

President,  Newburgh  Savings  Bank 

Casimir  Tag 

President,  German  Savings  Bank 

New  York  City 

For  Two  Years 

William  G.  Conklin 

President,  Franklin  Savings  Bank 

William  C.  Sturges 

President,  Dime  Savings  Bank  of 

Williamsburgh 


E,  T.  Maynard 

Comptroller,  Brooklyn  Savings  Bank 

For  Three  Years 

Wm.  J.  Coombs 

President,  South  Brooklyn  Savings 

Institution 

Charles  E.  Sprague 

President,  Union  Dime  Savings 

Institution,  New  York  City 

David  Hoyt 

Secretary,  Monroe  County  Savings 

Bank,  Rochester 

Members,  Ex-Officio 

Charles  E.  Hanaman 

President  of  the  Association 

Walter  Trimble 

First  Vice-President  of  the  Association 

William  Felsinger 
Second  Vice-Pres.  of  the  Association 

Robert  S.  Donaldson 

Third  Vice-President  of  the  Association 

Samuel  D.  Styles 

Treasurer  of  the  Association 

Charles  A.  Schieren 

Ex-President  of  the  Association 

Andrew  Mills 
Ex-President  of  the  Association 

Thomas  M.  Mulry 
Ex-President  of  the  Association 

Charles  A.  Miller 

Ex-President  of  the  Association 

Frederic  B.  Stevens 

Secretary  of  the  Association 

Nominating  -Committee 

John  T.  Smith 

President,  Mechanics'  Savings  Bank, 

Fishkill 


630 


x\PPENDIX 


1910-191 1 — Continued 
S.  MiTCHELi,  Rainey  William  F.  Patterson 

Treasurer,  Hudson  City  Savings  Treasurer,  Dr>'  Dock  Savings 

Institution,  Hudson,  N.  Y.  Institution,  New  York  City 


1911-1912 


President 


Charles  E,  Hanaman 
President,  The  Troy  Savings  Bank 

First  Vice-President 

Walter  Trimble 

President,  Bank  for  Savings, 

New  York  City 

Second  Vice-President 

Willi.au  Felsinger 

President,  New  York  Savings  Bank 

Third  Vice-President 
Robert  S.  Donaldson 
President,  Erie  County  Savings  Bank, 
Buffalo 

Secretary 

Frederic  B.  Stevens 

Treasurer,  National  Savings  Bank, 

Albany 

Treasurer 

Frank  M.  Hurlbut 

President,  Union  Square  Savings  Bank, 

New  York  City 

Executive  Committee 

For  One  Year 

Henry  A. Schenck 

President,  Bowery  Savings  Bank 

Thomas  F.  Balfe 

President,  Newburgh  Savings 

Bank 

Casimir  Tag 

President,  German  Savings  Bank, 

New  York  City 

For  Two  Years 

Willlam  G.  Conklin 

President,  I-'ranklin  Savings  Bank 

William  C.  Sturges 

President,  Dime  Savings  Bank  of 

Williamsburgh 

E.  T.  Maynard 

Comptroller,   Brooklyn   Savings 

Bank 


For  Three  Years 

William  J.  Coombs 

President,  South  Brooklyn  Savings 

Institution 

Chas.  E.  Sprague 

President,  Union  Dime  Savings 

Institution,  New  York  City 

David  Hoyt 

Secretary,  Monroe  County  Savings 

Bank,  Rochester 

Members,  Ex-Officio 

Charles  E.  Hanaman 

President  of  the  Association 

Walter  Trimble 

First  Vice-President  of  the 

Association 

William  Felsinger 
Second  Vice-Pres.  of  the  Association 

Robert  S.  Donaldson 

Third  Vice-President  of  the 

Association 

Charles  E.  Schieren 
Ex-President  of  the  Association 

Thomas  M.  Mulry 
Ex-President  of  the  Association 

Andrew  Mills 
Ex-President  of  the  Association 

Charles  A.  Miller 
Ex-President  of  the  Association 

Frank  M.  Hurlbut 
Treasurer  of  the  Association 

Frederic  B.  Stevens 
Secretary  of  the  Association 

Nominating  Committee 

John  T.  Smith 
President,  Mechanics'  Savings  Bank, 
Fishkill 
S.  Mitchell  Rainey 
Treasurer,  Hudson  City  Savings 
Institution,  Hudson,  N.  Y. 
William  F.  Patterson 
Treasurer,  Dry  Dock  Savings  Institu- 
tion, New  York  City 


APPENDIX 


631 


1912-1913 

President 

Harold  P.  Brewster 

President,  Rochester  Savings  Bank 

First  Vice-President 

Walter  Trimble 

President,  Bank  for  Savings, 

New  York  City 

Second  Vice-President 

William  Felsinger 

President,  New  York  Savings  Bank 

Third  Vice-President 

Robert  S.  Donaldson 

President,  Erie  County  Savings  Bank, 

Buffalo 


Secretary 

Frederic  B.  Stevens 

Treasurer ,Tlae  National  Savings  Bank, 

Albany 

Treasurer 

William  H.  Rockwood 

President,  Union  Square  Savings  Bank, 

New  York  City 


Executive  Committee 

Harold  P.  Brewster 

President  of  the  Association 

Walter  Trimble 

First  Vice-President  of  the 

Association 

William  Felsinger 

Second  Vice-President  of  the 

Association 

Robert  S.  Donaldson 

Third  Vice-President  of  the 

Association 

Charles  E.  Hanaman 
Ex-President  of  the  Association 


Thomas  M.  Mulry 
Ex-President  of  the  Association 

Charles  A.  Miller 
Ex-President  of  the  Association 

Frederic  B.  Stevens 
Secretary  of  the  Association 

William  H.  Rockwood 
Treasurer  of  the  Association 


John  M.  Satterfield Chairman  Group  No. 

Clinton  T.  Rose Chairman  Group  No. 

James  H.  Manning Chairman  Group  No. 

Andrew  Mills Chairman  Group  No. 

Eugene  F.  Barnes Chairman  Group  No. 

David  Hoyt Secretary    Group  No. 

W.  B.  Couch Secretary    Group  No. 

S.  Mitchell  Rainey Secretary    Group  No. 

George  E.  Edwards Secretary    Group  No. 

Henry  Stumpf Secretary    Group  No. 


1913-1914 


President 

William  Felsinger 

President,  New  York  Savings 

Bank 

Second  Vice-President 

Robert  S.  Donaldson 

President,  Erie  County  Savings  Bank, 

Buffalo 

Third  Vice-President 

Clinton  T.  Rose 

President,  Onondaga  County  Savings 

Bank,  Syracuse 


Secretary 

Frederic  B.  Stevens 

Treasurer,  The  National  Savings  Bank, 

Albany 

Treasurer 

William  H.  Rockwood 

President,  Union  Square  Savings  Bank, 

New  York  Cty 

Caunset 

Charles  A.  Miller 

President,  The  Savings  Bank  of 

Utica 


632 


APPENDIX 


Executive  Committee 

William  Felsinger 

President  of  the  Association 

Robert  S.  Donaldson 

Second  Vice-Pres.  of  the  Association 

Clinton  T.  Rose 

Third  Vice-President  of  the 

Association 

Edwin  P.  Maynard 

Ex-President  of  the  Association 


Harold  P.  Brewster 
Ex-President  of  the  Association 

Charles  E.  Han.aman 
Ex-President  of  the  Association 

Thomas  M.  Mulry 

Ex-President  of  the  Association 

Frederic  B.  Stevens 

Secretary  of  the  Association 

William  H.  Rockwood 
Treasurer  of  the  Association 


John  M.  Satterfleld Chairman  Group  No,  i 

Samuel  H.  Beach Chairman  Group  No.  2 

James  H.  Manning Chairman  Group  No.  3 

Henry  A.  Schenck  .      .      .      .      .      .      .      .  Chairman  Group  No.  4 

Eugene  F.  Barnes Chairman  Group  No.  5 

Davxd  Hoyt Secretary    Group  No.  i 

W.  B.  Couch Secretary   Group  No.  2 

S.  Mitchell  Rainey Secretary    Group  No.  3 

George  E.  Edwards Secretary    Group  No.  4 

Henry  Stumpf Secretary   Group  No.  5 


List  of  Presidents,  Vice-Presidents,  Secretaries,  and  Treasurers  of  the 
Savings  Banks  Association  of  the.  State  of  New  York  from  i8qj  to 
and  including  the  year  IQIJ. 

Presidents 

1893.  James  McMahon New  York  City 

1894.  John  Harsen  Rhoades 

1895.  John  Harsen  Rhoades 

1896.  John  Harsen  Rhoades 

1897.  John  Harsen  Rhoades 

1898.  John  Harsen  Rhoades 

1899.  John  Harsen  Rhoades 

1900.  Andrew  Mills 

1901.  Andrew  Mills 

1902.  Charles  A.  Schieren 

1903.  Charles  A.  Schieren 

1904.  William  B.  Van  Rensselaer Albany,  N.  Y. 

1905.  William  B.  Van  Rensselaer "  "     " 

1906.  William  B.  Van  Rensselaer "  "     " 

1907.  William  B.  Van  Rensselaer "  "     " 

1908.  Chas.  A.  Miller Utica,  N.  Y. 

1909.  Thos.  M.  Mulry New  York  City 

1910.  Chas.  E.  Hanaman Troy,  N.  Y. 

191 1.  Chas.  E.  Hanaman «       i<     « 

191 2.  Harold  P.  Brewster Rochester,  N.  Y. 

1913.  Edwin  P.  Maynard  (resigned) Brooklyn,  N.  Y. 

1913.  Wm.  Felsinger "  <<     «< 

First  Vice-Presidents 

1 893-1 905.     James  McMahon New  York  City. 

1906.     Edward  S.  Dawson Syracuse,  N.  Y. 

1907-1912.     Walter  Trimble New  York  City 

1913.     William  Felsinger "         "         " 


APPENDIX 


633 


Second  Vice-Presidents 

1900-1905.     Edward  S.  Dawson Syracuse,  N.  Y. 

1906-1909.     Chas.  E.  Hanaman Troy,  N.  Y. 

1910-1912.     William  Felsinger New  York  City 

1913.     Robert  S.  Donaldson Buffalo,  N.  Y. 

Third  Vice-Presidents 

1900-1905.     Charles  E.  Hanaman Troy,  N.  Y. 

1906-1908.     Thos.  M.  Mulry New  York  City 

1909.     William  Felsinger "        "         " 

1910-1912.     Robt.  S.  Donaldson Buffalo,  N.  Y. 

1913.     Clinton  T.  Rose        Syracuse,  N.  Y. 

Secretaries 
1893-1907.    Wm.  G.  Conklin New  York  City 

1908.  William  F.  Patterson 

1909.  Jonathan  B.  Currey "        "        " 

1910-1913.     Frederic  B,  Stevens Albany,  N.  Y, 

Treasurers 

1893. 

1894.    Andrew  Mills New  York  City 

1895-1899.     Andrew  Mills 

1900.  Jonathan  B.  Cxirrey 

1901.  Jonathan  B.  Currey 

1902-1909.     Samuel  D.  Styles 

1910.  Samuel  D.  Styles,  Frank  M.  Hurlbut       .... 

1911.  Frank  M.  Hurlbut 

1912-1913.     Wm.  H.  Rockwood 

Counsel 
1908.     Chas.  Addison  Miller  ...  Utica 


£ 

NOMINATING  COMMITTEES 

1894-I913    INCLUSIVE 

1894 
J.  Howard  King,  President,  Albany  Savings  Bank;   Samtiel  R.  Rainey, 
Secretary-Treasurer,  Hudson  City   Savings   Institution;  and   Constant   A. 
Andrews,  President,  United  States  Savings  Bank,  New  York  City. 

1895 
Charles  E.  Spragtje,  President,  Union  Dime  Savings  Institution;   Charles 
E.  Hanaman,  President,  Troy  Savings  Bank;  Benjamin  H.  Hxn^xiNGTON,  Pres- 
ident, Dime  Savings  Bank  of  Brooklyn. 

I 896- I 899 
Samuel  D.  Styles,  President,  North  River  Savings  Bank;  J.  B.  Currey,  Secre- 
tary Metropolitan  Savings  Bank;  Henry  Geckler,  Secretarj',  Dime  Savings 
Bank  of  Williamsburgh. 

1900 
Henry  Geckler,  Secretary,  Dime  Savings  Bank  of  Williamsburgh;   H.  B. 
Huntington,    President,  Dime  Savings  Bank  of  Brooklyn;   Frank  M.  Hurl- 
but,  President,  Institution  for  the  Savings  of  Merchants'  Clerks. 

1901 
H.  B.  Huntington,  President,  Dime  Savings  Bank  of  Brooklyn;  Frank  M. 
HuRLBUT,  President,  Institution  for  the  Savings  of  Merchants'  Clerks;   J.  V. 
Meserole,  President,  Williamsburgh  Savings  Bank. 

1902 
William  Felsinger,  President,  New  York  Savings  Bank;  Chas.  A.  Miller, 
Vice-President,  The  Savings  Bank  of  Utica;  D.  C.  Smith,  Vice-President  Me- 
chanics' Savings  Bank  of  Fishkill. 

1903-1904 
William  Felsinger,  President,  New  York  Savings  Bank;  Chas.  A.  Miller, 
Vice-President,  The  Savings  Bank  of  Utica;  John  T.  Smith,  President  Me- 
chanics' Savings  Bank,  Fishkill. 

I 905-1 909 
John  T.  Smith,  President,  Mechanics'  Savings  Bank,  Fishkill;  Henry  Has- 
LER,  President  Citizens'  Savings  Bank;  S.  Mitchell  Rainey,  Treasurer,  Hud- 
son City  Savings  Institution, 

John  T.  Smith,  President  Mechanics'  Savings  Banks,  Fishkill;  Frank  M. 
Hurlbut,  President,  Union  Square  Savings  Bank;  S.  Mitchell  Rainey,  Treas- 
urer, Hudson  City  Savings  Institution. 

634 


APPENDIX  63s 

1910 
John  T.  Smith,  President,  Mechanics'  Savings  Bank,  Fishkill;  S.  Mitchell 
Rainey,  Treasurer,  Hudson  City  Savings  Institution,  Hudson,  William  F. 
Patterson.  Treasurer,  Dry  Dock  Savings  Institution,  New  York  City. 

1911 
John  T.  Smith,  President,  Mechanics'  Savings  Bank,  Fishkill;  S.  Mitchell 
Rainey,  Treasurer,  Hudson  City  Savings  Institution,  Hudson;    Wm.  F.  Pat- 
terson, Treasurer,  Dry  Dock  Savings  Institution,  New  York  City. 

1912 
John  T.  Smith,  President,  Mechanics'  Savings  Bank,  Fishkill;   William  F. 
Patterson,  Treasurer,  Dry  Dock  Savings  Institution,  New  York  City;    S. 
Mitchell  Rainey,  Secretary -Treasurer,  Hudson  City  Savings  Institution. 

1913 
Marcus  T.  Hun  (Chairman),  Albany  Savings  Bank;    A.  P.  W.  KxnnaiS, 
Union  Dime  Savings  Bank,  New  York  City;  Franklin  W.  H.  Becker,  Western 
Savings  Bank,  Buffalo. 


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APPENDIX 


637 


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FIRST  AND  PRESENT  CONSTITUTIONS  OF 

THE    SAVINGS    BANKS    ASSOCIATION   OF   THE 

STATE  OF  NEW  YORK 

THE  FIRST  CONSTITUTION 

ADOPTED   JUNE    15,    1 894 

AfiTicLE  I.  This  Association  shall  be  called  The  Savings  Banks  Association 
of  the  State  of  New  York,  and  shall  have  for  its  objects  the  general  welfare  of 
Savings  Banks  in  this  State,  the  securing  of  the  proper  consideration  of  all  legis- 
lative action  affecting  Savings  Banks,  and  the  discussion  of  all  subjects  relating 
thereto. 

Article  II.  Any  Savings  Bank,  or  Savings  Institution,  of  the  State  of  New 
York  may  become  a  member  of  this  Association  upon  payment  of  such  annual 
dues  as  may  from  time  to  time  be  decided  upon,  and  may  send  one  delegate  to 
the  meetings  of  the  Association,  and  any  members  may  be  expelled  by  the  vote 
of  two  thirds  of  the  delegates  present  at  the  regular  meetings. 

Article  III.  The  officers  of  this  Association  shall  consist  of  a  President, 
Vice-President,  Secretary,  and  Treasurer,  who  shall  be  elected  armually;  and 
the  affairs  of  the  Association  shall  be  administered  by  an  Executive  Committee, 
to  be  elected  at  each  annual  meeting,  who  shall  hold  office  until  their  successors 
are  elected  or  appointed. 

Article  IV.  A  Committee  of  three  to  nominate  officers  and  an  Executive 
Committee  shall  be  appointed  at  each  annual  meeting,  who  shall  present  names 
for  election  to  the  subsequent  annual  meeting  of  the  Association,  but  nomina- 
tions may  be  made  by  any  member  at  such  meeting. 

Article  V.  The  President  shall  preside  at  all  meetings,  preserve  order,  ap- 
point all  committees  unless  otherwise  ordered,  and  arrange  for  holding  special 
meetings  at  the  written  request  of  ten  members  of  the  Association. 

In  case  of  absence  or  disability  of  the  President,  all  the  powers  and  duties 
devolving  upon  him  may  be  performed  by  the  Vice-President;  or  in  case  of  ab- 
sence or  disability  of  the  President  and  the  Vice-President,  the  Association  may 
designate  one  of  their  own  number  to  act  as  President  pro  tern. 

667 


668  APPENDIX 

Article  VI.  The  Executive  Committee  shall  consist  of  five  of  the  members 
of  the  Association  (the  President,  Vice-President,  Secretary,  and  Treasurer  being 
members  also,  ex  officio). 

It  shall  take  charge  of  the  general  business  of  the  Association,  receive  com- 
munications, arrange  for  holding  meetings,  procure  and  arrange  subjects  for 
discussion  and  the  order  in  which  they  may  come  before  the  Association,  provide 
for  speakers,  and  carry  out  resolutions  passed. 

The  attendance  of  five  members  of  the  Executive  Committee,  of  which  the 
ex  officio  members  may  form  a  part,  shall  constitute  a  quorum  for  the  transaction 
of  business,  and  they  shall  have  power  to  fill  vacancies  occurring  during  the  year 
in  their  own  body,  and  also  vacancies  for  Secretary  and  Treasurer. 

Article  VII.  Special  meetings  of  the  Executive  Committee  may  be  called 
by  request  of  three  of  its  own  members,  giving  one  week's  notice  to  the  Secretary 
desiring  him  to  call  such  special  meeting. 

Article  VIII.     The  Executive  Committee  shall  provide: 
First:     For  keeping  the  records  of  the  proceedings  of  their  own  meetings  as 
well  as  those  of  the  Association's  annual  or  special  meetings. 

Second:  They  shall  submit  at  each  annual  meeting  a  report  covering  their 
own  ofiicial  acts,  as  well  as  a  statement  of  any  new  or  unfinished  business  re- 
quiring attention. 

Article  IX.  The  Secretary  shall  make  and  have  charge  of  the  records  of  the 
Association,  as  well  as  those  of  the  Executive  Committee,  and  of  the  correspond- 
ence of  the  Executive  Committee,  and  also  of  all  other  committees  that  may  be 
attended  by  the  President. 

Article  X.  The  Treasurer  shall  receive  and  disburse  all  moneys  as  directed 
by  the  Executive  Committee,  all  vouchers  for  payments  being  countersigned  by 
the  President  or  Chairman  of  the  Executive  Committee. 

Article  XI.  The  annual  meetings  of  the  Association  shall  be  held  at  such 
times  and  places  as  may  be  determined  by  the  Executive  Committee. 

Article  XII.  The  expenses  of  the  Executive  Committee  in  carrying  out  the 
business  to  be  done  by  them  shall  be  provided  for  by  the  annual  dues  of  the  mem- 
bers of  the  Association,  provided,  however,  that  the  Committee  shall  have  no 
authority  to  incur  or  contract,  onbehalf  of  the  Association,  any  liability  beyond  the 
annual  dues  hereby  authorized,  and  only  that  for  the  purposes  hereby  mentioned. 

Article  XIII.  The  annual  dues  of  the  Banks,  members  of  the  Association, 
shall  be  as  follows: 

Those  having  deposits  of  $100,000  or  less  shall  pay  $5;  between  Si 00,000  and 
$1 ,000,000,  $ ro;  between  $1 ,000,000  and  not  exceeding  $5  ,ooo,ooo,$2o;  $5,000,000 
and  upward  to  $10,000,000,  $25;  in  excess  of  $10,000,000,  $50.  Such  dues  shall 
be  payable  on  the  first  day  of  June  in  each  year. 

Article  XIV.  Any  Bank  failing  to  pay  the  annual  dues  within  three  months 
after  notice  shall  be  considered  as  having  withdrawn  from  membership.     It  may 


APPENDIX  669 

be  reinstated  with  the  consent  of  the  Executive  Committee  upon  payment  of  all 
arrears;  and  any  Bank  may  withdraw  from  membership  by  giving  thirty  days' 
written  notice  to  the  Secretary  of  the  Association. 

Article  XV.  Subjects  for  discussion  must  be  submitted  to  the  Executive  Com- 
mittee in  writing  at  least  thirty  days  before  any  general  meeting  of  the  Association. 

Article  XVI.     The  order  of  business  at  the  annual  meeting  shall  be  as  follows : 
ist.     The  President,  or,  in  his  absence,  the  Vice-President,  or  the  Chairman 
of  the  Executive  Committee  shall  call  the  meeting  to  order. 

2d.      Roll  call. 

3d.      Address  by  the  President. 

4th.     Reading  of  minutes. 

5th.     Report  of  Executive  Committee. 

6th.     Report  of  the  Treasurer. 

7th.     Unfinished  business. 

8th.     New  business. 

9th.     Reading  of  papers. 
loth.     Report  of  Committee  on  Nominations, 
nth.     Election  of  new  officers  and  committees. 
1 2th.     Election  of  Committee  on  Nominations. 

Article  XVII.  This  Constitution  may  be  amended  at  any  annual  meeting 
by  a  vote  of  three  fourths  6l  the  delegates  present,  notice  of  such  proposed  amend- 
ment having  been  given  by  the  Secretary  to  each  member  at  least  thirty  days 
before  said  meeting. 

PRESENT  CONSTITUTION 

Revised,  May  2j,  IQ12 

Article  I.  The  Association  shall  be  called  The  Savings  Banks  Association 
of  the  State  of  New  York,  and  shall  have  for  its  objects  the  general  welfare  of  the 
Savings  Banks  in  this  State,  the  securing  of  the  proper  consideration  of  all  legis- 
lative action  affecting  Savings  Banks,  and  the  discussion  of  all  subjects  relating 
thereto. 

Article  II.  Any  Savings  Bank,  or  Savings  Institution,  of  the  State  of  New 
York,  may  become  a  member  of  this  Association  upon  payment  of  such  annual 
dues  as  may  from  time  to  time  be  decided  upon,  and  may  send  one  delegate  to  the 
meetings  of  the  Association,  and  any  member  may  be  expelled  by  the  vote  of  two 
thirds  of  the  delegates  present  at  the  regular  meetings. 

Delegates  shall  be  officers  or  trustees  of  the  Bank  they  represent,  and  shall  vote 
in  person,  and  not  by  proxy. 

Article  III.  The  officers  of  this  Association  shall  consist  of  a  President, 
three  Vice-Presidents,  Secretary,  and  Treasurer,  who  shall  be  elected  annually; 
and  who  shall  hold  office  until  their  successors  are  elected  or  appointed. 

The  officers  shall  be  ex  officio  members  of  the  Executive  Committee  of  their 
respective  groups,  and  of  the  Executive  Committee  of  the  Association. 


670  APPENDIX 

Article  IV.  For  the  better  realization  of  the  aims  of  the  Association,  the 
members  shall  be  divided  into  five  groups,  as  nearly  as  possible  according  to 
geographical  division,  as  follows: 

Group  I.  Consisting  of  the  Counties  of  Niagara,  Erie,  Chautauqua,  Orleans, 
Genesee,  Wyoming,  Cattaraugus,  Monroe,  Livingston,  Wayne,  Ontario,  Yates, 
Seneca,  Steuben,  and  Allegany. 

Group  2.  Consisting  of  the  Counties  of  Cayuga,  Tompkins,  Chemung,  Tioga, 
Broome,  Chenango,  Cortland,  Onondaga,  Oswego,  Jefferson,  St.  Lawrence, 
Lewis,  Herkimer,  Oneida,  Madison,  and  Schuyler. 

Group  3.  Consisting  of  the  Counties  of  FrankUn,  Hamilton,  Fulton,  Mont- 
gomery, Otsego,  Delaware,  Sullivan,  Orange,  Ulster,  Greene,  Schoharie,  Schenec- 
tady, Albany,  Saratoga,  Warren,  Essex,  CUnton,  Washington,  Rensselaer,  Co- 
lumbia, Dutchess,  Putnam,  and  Rockland. 

Group  4.     Consisting  of  the  Counties  of  New  York  and  Westchester. 

Group  5.  Consisting  of  the  Counties  of  Kings,  Queens,  Suffolk,  Nassau,  and 
Richmond. 

Article  V.  The  President  shall  preside  at  all  meetings,  preserve  order,  ap- 
point all  committees  unless  otherwise  ordered,  and  arrange  for  holding  special 
meetings  at  the  written  request  of  ten  members  of  the  Association.  In  case  of 
absence  or  disability  of  the  President,  all  the  powers  and  duties  devolving  upon 
him  may  be  performed  by  the  Vice-Presidents,  or,  in  case  of  absence  or  disability 
of  the  President  and  Vice-Presidents,  the  Association  may  designate  one  of  their 
own  number  to  act  as  President  pro  lem. 

Article  VI.  The  Executive  Committee  shall  consist  of  the  officers  of  the 
Association,  the  Chairman  and  Secretary  of  each  group,  who,  when  unable  to 
serve,  shall  appoint  a  temporary  substitute,  and  those  who  have  held  the  office  of 
President  of  the  Association  within  five  years. 

It  shall  take  charge  of  the  general  business  of  the  Association,  receive  commu- 
nications, arrange  for  holding  meetings,  procure  and  arrange  subjects  for  discus- 
sion, and  the  order  in  which  they  come  before  the  Association,  provide  for  speak- 
ers, and  carry  out  resolutions  passed. 

The  attendance  of  six  members  of  the  Executive  Committee,  of  which  the  ex 
officio  members  may  form  a  part,  shall  constitute  a  quorum  for  the  transaction 
of  business,  and  they  shall  have  power  to  fill  vacancies  occurring  during  the  year 
in  the  office  of  Secretary  or  Treasurer. 

Article  VII.  Special  meetings  of  the  Executive  Committee  may  be  called 
at  the  request  of  three  of  its  own  members,  giving  two  days'  notice  to  the  Secre- 
tary desiring  him  to  call  such  special  meeting. 

Article  VIII.    The  Executive  Committee  shall  provide: 
First:     For  keeping  the  records  of  the  proceedings  of  their  own  meetings,  as 
well  as  those  of  the  Association's  annual  or  special  meetings. 

Second:  They  shall  submit  to  each  annual  meeting  a  report  covering  their 
own  official  acts,  as  well  as  a  statement  of  any  new  or  unfinished  business  re- 
quiring attention. 


APPENDIX  671 

Article  IX.  The  Secretary  shall  make  and  have  charge  of  the  records  of 
the  Association,  as  well  as  those  of  the  Executive  Committee,  and  of  the  cor- 
respondence of  the  Executive  Committee,  and  also  of  all  other  committees  that 
may  be  attended  by  the  President. 

Article  X.  The  Treasurer  of  the  Association  shall  receive  and  disburse  all 
moneys  as  directed  by  the  Executive  Committee,  all  vouchers  for  payments 
being  countersigned  by  the  President  or  Chairman  of  the  Executive  Committee. 

Article  XI.  The  annual  meetings  of  the  Association  shall  be  held  at  such 
times  and  places  as  may  be  determined  by  the  Executive  Committee. 

Article  XII.  The  expenses  of  the  Executive  Committee  in  carrying  out  the 
business  to  be  done  by  them  shall  be  provided  for  by  the  annual  dues  of  the  mem- 
bers of  the  Association,  provided,  however,  that  the  Committee  shall  have  no 
authority  to  incur  or  contract,  on  behalf  of  this  Association,  any  Uability  beyond 
the  annual  dues  hereby  authorized,  and  only  that  for  the  purposes  hereby  desig- 
nated. 

Article  XIII.  The  annual  dues  of  banks,  members  of  the  Association,  shall 
be  as  follows: 

Those  having  deposits  of  $100,000  or  less  shall  pay  $5;  between  $100,000  and 
$i,ooo,ooo,$io;  between  $1,000,000  and  not  exceeding $5 ,000,000,  $20;  $5 ,000,000 
and  upward  to  $10,000,000,  $25;  in  excess  of  $10,000,000,  and  not  exceeding 
$20,000,000,  $50.  For  each  $10,000,000,  or  any  part  thereof  in  excess  of 
$20,000,000  of  deposits,  the  annual  dues  shall  be  increased  by  $10.  Such  dues 
shall  be  payable  on  the  first  day  of  June  in  each  year. 

Article  XIV.  Any  bank  failing  to  pay  the  annual  dues  within  three  months 
after  notice  shall  be  considered  as  having  withdrawn  from  membership.  It  may 
be  reinstated  with  the  consent  of  the  Executive  Committee  upon  payment  of  all 
arrears;  and  any  bank  may  withdraw  from  membership  by  giving  thirty  days' 
written  notice  to  the  Secretary'  of  the  Association. 

Article  XV.  Subjects  for  discussion  maybe  subinitted  to  the  Executive  Com- 
mittee in  writingat  least  thirty  days  before  any  general  meeting  of  the  Association. 

Article  XVI .    The  order  of  business  at  the  annual  meeting  shall  be  as  follows : 
I  St.    The  President,  or,  in  his  absence,  the  Vice-President,  or  the  Chairman 
of  the  Executive  Committee,  shall  call  the  meeting  to  order. 

2d.      Roll  caU. 

3d.      Address  by  the  President. 

4th.     Reading  of  minutes. 

Sth.    Report  of  Executive  Committee. 

6th.     Report  of  the  Treasurer. 

7th.     Unfinished  business. 

Sth.     New  business. 

9th.     Reading  of  papers, 
loth.     Election  of  new  officers. 


672  APPENDIX 

Article  XVII.  Members  of  the  Association  shall  belong  to  the  group  in  which 
their  place  of  business  is  located,  but  members  may  be  transferred  from  one 
group  to  another  with  the  approval  of  the  Chairman  of  the  group  to  which  they 
belong  and  of  the  Chairman  of  the  group  to  which  they  desire  to  be  transferred. 

Notice  of  such  transfer  shall  be  filed  with  the  Secretary  and  Treasurer  of  the 
Association. 

Article  XVIII.  Each  group  shall  hold  at  least  one  meeting  each  year,  at 
such  time  and  place  as  each  group  may  determine;  provided,  however,  that  one 
of  such  meetings,  to  be  called  the  annual  meeting,  shall  be  held  not  later  than 
December  ist,  and  that  the  first  meeting  shall  be  called  by  the  President  of  the 
Association. 

Unless  otherwise  arranged,  the  meetings  shall  be  held  as  follows:  Group  i,  at 
Buffalo;  Group  2,  at  Syracuse;  Group  3,  at  Albany;  Group  4,  at  New  York; 
Group  5,  at  Brooklyn. 

Each  group  shall  elect  at  its  annual  meeting  a  Chairman,  a  Secretary,  a  Treas- 
urer, and  an  Executive  Committee  consisting  of  three  members. 

Article  XIX.  The  Chairman  of  each  group  shall,  previous  to  each  annual 
meeting  of  the  Association,  appoint  a  representative  from  his  group  to  act  as  a 
member  of  the  Nominating  Committee  to  nominate  officers  for  the  ensuing  year. 
No  member  of  the  Executive  Committee,  nor  any  candidate  for  office,  shall  be  a 
member  of  such  Nominating  Committee. 

Article  XX.  The  Executive  Committee  may  appropriate  such  sums  as  in 
its  opinion  may  be  necessary  for  the  expenses  of  the  several  groups,  and  the 
amounts  so  appropriated  shall  be  paid  by  the  Treasurer  of  the  Association  to  the 
Treasurer  of  each  of  said  groups.  But  the  Association  shall  not  be  liable  for  any 
debt  contracted  or  obhgation  incurred  by  any  group  or  the  officers  thereof. 

.\rticle  XXI.  This  Constitution  may  be  amended  at  any  annual  meeting 
by  a  vote  of  three  fourths  of  the  banks  represented  at  such  meetings,  notice  of 
such  proposed  amendment  having  been  given  by  the  Secretary  to  each  member 
at  least  thirty  days  before  said  meeting. 


H 

FIRST  MEETING  OF  SAVINGS  BANKS  OFFICERS 
OF  NEW  YORK  STATE 

A  meeting  of  the  representatives  of  various  Savings  Banks  of  the 
State  of  New  York  was  held  at  the  Chamber  of  Commerce,  New 
York  City,  on  Thursday,  May  26,  1892.  At  this  meeting  Mr. 
James  McMahon,  President  of  the  Emigrant  Industrial  Savings 
Bank,  New  York  City,  presided,  after  the  meeting  had  been  called 
to  order  by  Mr.  Alexander  E.  Orr.  Mr.  Andrew  Mills,  President 
of  the  Dry  Dock  Savings  Bank,  New  York,  was  chosen  Secretary. 
The  demand  for  legislation  to  increase  the  scope  of  investments  for 
Savings  Banks  was  the  primary  cause  for  the  calling  of  this  meeting. 
It  is  believed  that  this  was  the  first  time  that  officers  of  the  Savings 
Banks  of  the  State  of  New  York  had  ever  met  as  a  body.  As  Presi- 
dent McMahon  said  in  his  opening  address:  "Nothing  can  be  lost 
and  very  much  gained  through  coming  in  personal  contact  with  and 
knowing  each  other.  Our  interests  are  identical,  and  having  no 
other  ends  to  serve  than  to  do  our  duty  faithfully  to  the  public  at 
large,  we  are  in  a  position  to  discuss  the  various  questions  coming 
before  us  calmly,  soberly,  and  in  a  spirit  of  absolute  fair  dealing  as 
between  ourselves  as  officers,  the  depositors  we  represent,  the  Bank- 
ing Department  at  Albany,  and  the  Legislature  of  this  State,  which 
properly  controls  and  governs  the  management  of  the  institutions 
we  serve." 

Secretary  Mills  stated,  in  response  to  a  question,  that  he  had  re- 
ceived responses  from  upward  of  eighty  Savings  Banks  throughout 
the  State,  all  of  them  either  expressing  the  intention  of  sending  a 
representative,  or  at  least  approving  very  heartily  of  the  idea  of  a 
Convention  of  Savings  Banks  Officers. 

The  following  Savings  Banks  were  represented  at  this  initial 
meeting : 

Albany  Savings  Bank,  Albany,  by  J.  Howard  King,  President. 

Exchange  Savings  Bank,  Albany,  by  J.  F.  McElroy,  Second  Vice-President. 

Home  Savings  Bank,  Albany,  by  John  D.  Capron,  Treasurer. 

Albany  County  Savings  Bank,  Albany,  by  Wm.  N.  S.  Sanders,  Treasurer. 

Auburn  Savings  Bank,  Auburn,  by  E.  H.  Tovvnsend,  Treasurer. 

Cayuga  County  Savings  Bank,  Auburn,  by  W.  H.  Meaker,  Treasurer. 

Amsterdam  Savings  Bank,  Amsterdam,  by  S.  H.  French,  President. 

673 


674  APPENDIX 

Binghamton  Savings  Bank,  Binghamton,  by  H.  G.  Rogers,  Treasurer;  J.  K. 
Weldon,  Trustee. 

South  Brooklyn  Savings  Institution,  Brooklyn,  by  A.  E.  Orr,  President. 

Germania  Savings  Institution,  Brooldyn,  by  F.  W.  Schroeder,  President. 

Dime  Savings  Institution,  Brooklyn,  by  G.  S.  Hutchinson,  President;  E.  H. 
Kellogg,  Vice-President. 

Kings  County  Savings  Institution,  Brooklyn,  by  James  S.  Beams,  Vice-Presi- 
dent. 

Brooklyn  Savings  Bank,  Brooklyn,  by  F.  E.  Flandreau,  Cashier. 

Erie  County  Savings  Bank,  Buffalo,  by  Philo  D.  Beard,  First  Vice-President. 

College  Point  Savings  Bank,  College  Point,  by  Hugo  Funke,  Second  Vice- 
President. 

Queens  County  Savings  Bank,  Flushing,  by  L.  M.  Franklin,  Secretary. 

Hudson  City  Savings  Institution,  Hudson,  by  Samuel  R.  Rainey,  Treasurer. 

Farmers'  and  Mechanics'  Savings  Bank,  Lockport,  by  Isaac  H.  Babcock,  Presi- 
dent; J.  E.  Emerson,  Secretary  and  Treasurer. 

Union  Savdngs  Bank,  Mamaroneck,  by  Bradford  Rhodes,  President. 

Portchester  Savings  Bank,  Portchester,  by  VV.  P.  Abendroth,  President. 

Poughkeepsie  Saxangs  Bank,  Poughkeepsie,  by  Henry  V.  Pelton,  Treasurer; 
Edward  S.  Atwater,  Treasurer. 

Rhinebeck  Savings  Bank,  Rhinebeck,  by  T.  W.  Bates,  President;  T.  A.  Traver, 
Secretary   and  Treasurer. 

Riverland  Savings  Bank,  Riverland,  by  Nat.  W.  Foster,  President;  Clifford  B. 
Ackerly,  Secretary. 

Rochester  Savings  Bank,  Rochester,  by  S.  J.  Macy,  Second  Vice-President. 

Mechanics'  Savings  Bank,  Rochester,  by  T.  A.  Whittlesey,  Attorney  and 
Trustee. 

Rondout  Savings  Bank,  Rondout,  by  J.  E.  Derrenbacher,  Secretary. 

Sing  Sing  Savings  Bank,  Sing  Sing,  by  Isaac  B.  Noxon,  Secretary. 

Southold  Savings  Bank,  Southold,  by  H.  H.  Hunting,  Secretary  and  Treasurer. 

Onondaga  County  Savings  Bank,  Syracuse,  by  E.  S.  Dawson,  President;  R.  A. 
Bonta,  Secretary. 

Savings  Bank  of  Utica,  Utica,  by  Ephraim  Chamberlain,  President. 

Warwick  Savings  Bank,  Warwick,  by  W.  L.  Ogden,  Vice-President,  Thos.  Burt, 
Treasurer. 

People's  Savings  Bank,  Yonkers,  by  R.  Dutton,  President. 

Yoiikers  Savings  Bank,  Yonkers,  by  S.  E.  Getty,  Secretary. 

Bowery  Savings  Bank,  New  York,  by  Edward  Wood,  President. 

Bank  for  Savings,  New  York,  by  J.  A.  Roosevelt,  Second  Vice-President. 

Emigrant  Industrial  Savings  Bank,  New  York,  by  Jas.  McMahon,  President. 

Seamen's  Bank  for  Savings,  New  York,  by  W.  C.  Sturges,  President. 

Greenwich  Savings  Bank,  New  York,  by  J.  Harsen  Rhoades,  President. 

German  Savings  Bank,  New  York,  by  G.  F.  Amthor,  Treasurer. 

Dry  Dock  Savings  Institution,  New  York,  by  Andrew  Mills,  President. 

Union  Dime  Savings  Institution,  New  York,  by  Chas.  E.  Sprague,  Treasurer. 

Citizens'  Savings  Bank,  New  York,  by  E.  A.  Quintard,  President. 

East  River  Savings  Institution,  New  York,  by  W.  H.  Slocum,  President. 

New  York  Savings  Bank,  New  York,  by  S.  W.  Jones,  President;  Fred.  Hughson, 
Treasurer. 

Franklin  Savings  Bank,  New  York,  by  W.  G.  Conklin,  Secretar>'. 

Institution  for  Savings  Merchants'  Clerks,  New  York,  by  And.  Warner,  Presi- 
dent; Geo.  A.  Robbins,  Vice-President. 

Metropolitan  Savings  Bank,  New  York,  by  Geo.  N.  Conklin,  Secretary. 

Harlem  Savings  Bank,  New  York,  by  Chas.  B.  Tooker,  President. 

United  States  Savings  Bank,  New  York,  by  Cons.  A.  Andrews,  President;  G.  A. 
Middlcbrook,  Secretary  and  Treasurer. 

1 2th  Ward  Savings  Bank,  New  York,  by  Anton  Rasines,  President. 

Newburgh  Savings  Bank,  Newburgh,  by  Thos.  F.  Balfe,  Treasurer. 


APPENDIX  67s 

Letters  were  received  from  the  following  Banks  approving  of  the 
meeting  and  endorsing  its  objects: 

National  Savings  Bank Albany- 
Albany  City  Savings  Institution Albany 

Mechanics'  &  Farmers'  Bank Albany 

Williamsburgh  Savings  Bank Brooklyn 

East  Brooklyn Brooklyn 

Western  Savings  Bank Bufifalo 

Buffalo  Savings  Bank Buffalo 

Mechanics'  Savings  Bank Cohoes 

Cohoes  Savings  Bank Cohoes 

Cortland  Savings  Bank Cortland 

Goshen  Savings  Bank Goshen 

Ithaca  Savings  Bank Ithaca 

Kingston  Savings  Bank Kingston 

Long  Island  City  Savings  Bank Long  Island  City 

Middletown  Savings  Bank Middletown 

West  Side  Savings  Bank New  York 

American  Savings  Bank New  York 

Excelsior  Savings  Bank New  York 

Pawling  Savings  Bank Pawling 

Monroe  County  Savings  Bank Rochester 

Syracuse  Savings  Bank Syracuse 

Troy  Savings  Bank Troy 

And  Hon.  C.  M.  Preston,  Bank  Superintendent. 


FIRST  REPORT  OF 

THE  BANK  FOR  SAVINGS  IN  THE 

CITY  OF  NEW  YORK 

(1820) 

It  is  proper  briefly  to  note  the  practical  success  of  this  institution 
w-ithin  a  short  period  after  its  organization  and  the  favorable  effect 
of  this  success  in  disarming  hostility  to  similar  measures  thereafter. 

The  first  report  of  the  institution  was  made  to  the  legislature  the 
following  year  (1820),  and  was  accompanied  by  an  application  for 
an  amendment  of  its  charter  so  as  to  authorize  investments  in  loans 
upon  real  estate. 

Concerning  the  subject  generally,  Governor  Clinton,  in  his  mes- 
sage to  the  legislature,  said: 

"The  Bank  for  Savings  in  the  City  of  New  York,  instituted  at  the 
last  session,  to  cherish  meritorious  industry,  to  encourage  frugality 
and  retrenchment,  and  to  promote  the  welfare  of  famihes,  the  cause 
of  morality,  and  the  good  order  of  society,  has  already  manifested  its 
claims  to  your  confidence  by  an  accumulation  of  more  than  one 
hundred  and  fifty  thousand  dollars  in  small  deposits,  and  by  shed- 
ding a  benign  influence  on  society.  The  application  of  this  institu- 
tion to  authorize  loans  on  real  estate,  as  well  as  any  other  provisions 
subsersdent  to  its  salutary  objects,  will  undoubtedly  receive  your 
sanction." 

The  following  is  the  report  of  the  Bank  made  to  the  Legislature  in 
1820,  covering  the  operations  of  only  six  months,  the  first  report  of 
the  kind  ever  made  to  the  Legislature  of  New  York.  It  is  a  model 
of  its  kind,  pure  in  thought  and  chaste  in  diction: 

REPORT 

Conformably  to  the  provisions  of  an  Act  entitled:  "An  Act  to  in- 
corporate an  Association  by  the  name  of  a  Bank  for  Savings,  in  the 
City  of  New  York,"  the  trustees  now  beg  leave  to  present  their  first 
report  to  the  honorable  the  Legislature  of  the  State,  and  the  honor- 
able Common  Council  of  the  City  of  New  York,  as  follows: 

First:    That  the  Bank  for  Savings  was  opened  for  deposits  in  a 


APPENDIX  677 

room  of  the  New  York  Institution,  granted  to  the  trustees  by  the 
Academy  of  Arts,  and  approved  by  the  Corporation,  for  the  term  of 
two  years,  gratis,  on  Saturday,  the  3d  of  July,  1819,  when,  from 
eighty  depositors,  the  trustees  had  the  satisfaction  of  receiving  the 
sum  of  $2,807. 

Second:  That  from  the  aforesaid  3d  day  of  July,  until  the  27th 
of  December  inclusive,  being  a  period  of  six  entire  months,  there 
had  been  deposited  in  the  Bank  for  Savings,  by  1,527  depositors,  the 
sum  of  $153,378.31. 

Third:  That  the  sum  of  $148,372.27,  as  will  appear  by  the  treas- 
urer's account  hereunto  annexed,  has  been  invested  in  the  public 
funds,  agreeable  to  law,  and  that  the  sum  of  $6,606  has  been  drawn 
out  by  the  depositors.  Of  those  who  have  drawn  out,  the  number  of 
forty-six  have  closed  their  accounts,  and  twenty-one  have  taken 
out  only  a  part,  and,  therefore,  their  accounts  remain  open. 

Fourth:  The  depositors,  having  been  classed  under  various 
heads,  they  stand  in  the  books  of  the  trustees  as  follows:  [Here  fol- 
lows an  enumeration  of  occupations  of  depositors,  embracing  me- 
chanics, laborers,  tradesmen,  and  domestics,  840;  minors,  male, 
287;  minors,  female,  276;  widows,  98;  orphans,  20;  apprentices,  15; 
unclassified,  24;  total,  1,527.]  Having  given  these  statements  which 
the  act  aforesaid  and  the  sense  of  their  own  duty  to  the  depositors  re- 
quired, the  trustees  hope  that  they  shall  stand  excused  in  making 
such  remarks  as  this  interesting  subject  obviously  suggests. 

It  was  to  be  expected  that  an  institution  which,  by  inculcating 
economy  among  the  middle  and  lower  classes  of  society,  and  in- 
ducing them  to  spare  their  earnings  for  future  exigencies,  would 
necessarily  withdraw  them  from  places  of  pubHc  resort,  and  thus 
excite  the  enmity  of  those  whose  emolument  was  the  fruit  of  prodi- 
gal expenditure.  The  trustees,  however,  are  gratified  in  saying  that 
few  such  instances  have  come  to  their  knowledge.  On  the  contrar}% 
the  classifications  of  depositors  will  furnish  several  instances,  even 
of  pubUc  tavern-keepers  who  have  brought  their  money  to  the  bank 
for  safety  and  increase.  Nor  are  the  trustees  without  hope  that 
such  examples  v/ill  operate  upon  many  of  those  whose  conduct  has 
heretofore  been  reprehensible.  A  reform  at  the  source  of  waste  \\dll 
soon  spread  its  influences  through  a  large  portion  of  our  population. 

The  Board  of  Trustees,  previous  to  opening  the  books  for  the  re- 
ceipt of  deposits,  established  a  system  of  management  and  inspec- 
tion for  the  bank,  which  in  its  operation  has  proved  highly  benefi- 
cial. They  appointed,  in  rotation,  three  of  their  number  to  attend 
at  the  bank  as  a  Committee  for  one  month.  It  was  made  the  duty 
of  this  Committee  to  receive  deposits,  to  see  that,  the  entries  were 
duly  made,  to  make  inquiries  as  to  the  situation  of  the  depositors, 
and  ask  such  further  questions  as  might  promote  the  welfare  either 
of  the  individuals  or  of  the  institution.     By  this  means  the  whole  of 


6  78  APPENDIX 

the  Board  of  Trustees  have  become  familiar  with  the  depositors,  and 
while  their  confidence  in  those  to  whom  they  have  committed  the 
safeguard  and  improvement  of  their  Uttle  funds  has  been  confirmed, 
it  has  afforded  an  opportunity,  readily  embraced  by  the  trustees, 
of  giving  such  advice  to  many  of  the  depositors  as  they  believed 
would  tend  to  promote  careful  habits  and  moral  feeUng.  The  grati- 
fication which  they  have  received  in  numerous  instances  has  amply 
repaid  the  attending  Committee  this  gratuitous  labor. 

The  investment  of  the  funds  has  been  intrusted  to  a  special  Com- 
mittee, consisting  of  Messrs.  John  Mason,  Jacob  Sherred,  and 
William  Wilson,  who  report  to  the  board  at  their  monthly  meeting 
the  manner  in  which  the  funds  have  been  disposed  of.  The  Treas- 
urer also  reports  once  a  month  the  amount  received  from  the  de- 
posits, and  how  it  has  been  expended.  By  this  mode,  every  opera- 
tion is  at  once  known  to  each  individual  trustee;  and  such  checks 
are  furnished  as  to  prevent  the  possibility  of  the  smallest  loss  to  de- 
positors. 

The  different  classes  of  depositors  will  furnish  various  reflections 
calculated  to  place  banks  for  savings  high  in  the  esteem  of  the  polit- 
ical economist,  the  practical  philanthropist,  and  the  diligent  pro- 
moter of  sound  morals. 

In  every  part  of  an  active  population,  and  particularly  in  large 
cities,  the  difficulty  of  procuring  the  reward  of  labor  is  not  so  great 
as  the  power  to  preserve  it.  The  man  who  attends  to  the  regular 
discharge  of  his  duties,  and  is  enabled  to  lay  up  a  weekly  sum  from 
his  hard-earned  income,  is  too  often  the  dupe  of  the  idle,  the  profli- 
gate, the  designing,  or  the  unfortunate.  Incaution,  and  sometimes 
an  excusable  vanity,  prompts  the  possessor  of  an  increasing  fund  to 
reveal  it  to  his  less  prosperous  neighbor.  The  desire  of  accumula- 
tion and  the  hope  of  bettering  his  condition  will  induce  the  listener 
to  try  the  means  with  which  his  friend  can  furnish  him  on  some  ob- 
ject of  speculation.  He  tries  and  both  are  ruined.  There  are  others 
who  live  only  to  prey  upon  society;  they  insinuate  themselves  into 
the  confidence  of  the  unsuspecting;  give  the  most  plausible  reasons 
for  the  small  sums  they  ask,  and  the  strongest  assurances  of  a  speedy 
repayment.  The  money  is  loaned;  but  the  lender  too  soon  finds 
that  the  fruit  of  years  of  labor  is  gone  forever. 

Many  cases  have  come  before  the  trustees  wherein  the  above 
was  justified  by  ample  details.  The  causes,  as  after  stated  by  the 
sufferers  themselves,  arose  alike  from  their  want  of  some  secure  place 
of  deposit  and  their  ignorance  how  to  improve  what  they  had  laid 
up.  The  sums  are  generally  too  small  to  be  received  at  any  of  the 
banks;  and  when  this  is  not  the  case,  it  was  found  equally  as  diffi- 
cult to  retain  it  as  if  it  had  been  actually  in  the  owner's  hands;  the 
temptation  to  loan  was  the  same.  Though  many  depositors  under- 
stood how  to  invest  their  money  in  public  stocks,  yet  anticipating  an 


APPENDIX  679 

early  use  for  it,  or  fearing  a  loss  from  the  fluctuation  of  the  funds, 
they  preferred  letting  it  lie  useless.  In  numerous  instances  sums 
from  $100  to  $300  had  lain  unimproved  for  many  years,  while  others 
had  loaned  and  lost  the  whole.  The  banks  for  savings  provide 
almost  the  only  remedy :  they  give  security  to  the  depositor,  improve 
his  little  stock,  and,  at  fixed  periods,  allow  him  to  withdraw  the 
whole,  if  his  inclination  or  interest  should  prompt  him. 

The  value  of  an  institution  is  to  be  estimated  by  the  evil  which  it 
prevents,  or  by  the  good  which  it  produces.  In  some,  the  effects  are 
more  remote,  in  others  more  immediate.  Banks  for  savings  are 
among  the  latter;  the  attempt  is  no  sooner  made  than  the  most  salu- 
tary effects  follow.  It  has  formed  the  most  pleasing  and  interesting 
part  of  the  duty  of  the  monthly  Committee  to  observe  and  note  these 
effects.  The  effect  on  the  moral  habits  is  not  more  certain  than 
striking;  he  who  has  learnt  to  be  economical  has  first  gotten  rid  of 
pernicious  modes  of  spending  money.  Every  time  he  adds  to  his 
amount,  he  has  an  additional  motive  for  perseverance.  In  the  pro- 
vision he  is  making  for  futurity  is  associated  all  which  can  gratify 
him  as  a  father,  a  husband,  a  guardian,  or  a  friend.  The  talent 
which  heaven  has  committed  to  his  care,  he  improves  for  the  objects 
of  his  affections;  this,  again,  endears  them  to  him,  and  thus  the  sum 
,  of  human  happiness  is  increased  and  extended.  It  is  impossible  for 
men  continuing  to  act  on  such  principles  to  be  immoral. 

The  trustees  are  glad  to  report  that  the  habit  of  saving  among  the 
depositors  becomes  very  soon  not  only  delightful  but  permanent. 
Those  who  have  brought  their  one  dollar  are  anxious  to  increase  it 
to  five,  and  so  on.  The  number  of  re-deposits  sufficiently  confirms 
this  fact;  and  such  has  been  the  effects  on  emigrants  from  Great  Brit- 
ain that  the  very  guineas  which  they  received  from  the  banks  for 
savings  at  home  they  have  deposited  in  the  one  in  this  city  imme- 
diately after  landing. 

There  are  several  classes  of  depositors  which  the  trustees  cannot 
forbear  to  remark  upon. 

Seamen  are  proverbially  improvident,  not  so  much  perhaps  from 
a  love  of  waste  as  from  a  total  ignorance  how  to  dispose  of  their 
money.  Having  no  one  to  direct  them,  the  wages  which  they  have 
earned,  amidst  storms  and  tempests,  they  scatter  on  shore  without 
reflection.  Of  this  useful  class  of  men,  a  few  have  found  their  way 
to  our  bank,  and  the  trustees  will  do  all  in  their  power  to  increase 
the  number.  One  seaman  on  one  of  the  regular  traders  for  Liverpool 
brought  home  with  him  in  silver  $360;  his  captain  directed  him  to 
the  Bank  for  Savings.  He  soon  deposited  his  burden,  and  appeared 
heartily  pleased  that,  under  the  guidance  of  his  commander,  he  had 
at  last  found  a  harbor  of  safety  for  his  small  property. 

The  clergy  are  a  body  of  gentlemen  perhaps  more  entitled  to  our 
gratitude  and  care  than  any  other  in  the  community.     Their  means 


68o  APPENDIX 

in  general  arc  small, their  families  usually  large,  and,  from  the  nature 
of  their  office,  they  are  prevented  by  trade  to  increase  their  income. 
Many  of  them,  however,  can  save  a  little,  and  they  have  availed 
themselves  of  the  bank  to  deposit  it  for  improvement.  When  the 
trustees  look  round  on  the  number  of  destitute  widows  of  once  re- 
spectable and  useful  clergymen,  they  cannot  but  hail  the  institution 
as  the  means  of  affording,  by  the  provident  care  of  the  living,  com- 
fort, and  perhaps  independence,  for  future  widows  and  orphans. 

The  attention  which  has  been  paid  by  parents  and  guardians, 
since  the  opening  of  our  Bank,  to  the  future  comfort  and  security  of 
minors,  is  not  one  of  the  least  blessings  which  shall  flow  from  this 
institution.  The  deposits  for  this  class  are  very  numerous;  and 
while  it  is  calculated  to  excite  the  gratitude  of  the  young  beings  for 
whose  use  the  deposits  have  been  made,  it  holds  out  to  them,  v/hen 
arrived  at  maturity,  the  example  and  the  means  by  which  succeed- 
ing generations  are  to  be  benefited  and  improved. 

As  parents,  as  citizens,  and  as  men,  the  trustees  exult  in  the  pros- 
pects which  the  Bank  for  Savings  holds  out  to  this  growing  city  and 
State.  The  habits  which  a  resort  to  it  induce  hold  out  the  best 
pledge  for  a  reduction  in  the  public  burdens,  as  they  are  connected 
with  indigence  and  want.  They  tend  to  inspire  a  spirit  of  inde- 
pendence, and  in  their  moral  operation  lessen  crime,  poverty,  and 
disease.  They  teach  man  to  depend  upon  his  own  exertions,  en- 
courage industry,  frugality,  cleanHncss,  and  self-respect;  and  effec- 
tually prevent  those  who  are  so  fortunate  as  to  be  influenced  by 
them  from  applying  either  to  public  provisions  or  private  bounty 
for  support. 

The  trustees  take  this  opportunity  of  thanking  the  gentlemen  con- 
nected as  tellers,  clerks,  and  porters,  in  the  different  banks,  for  the 
cheerful  manner  in  which  they  have  rendered  their  services  on  the 
evenings  of  deposit.  Their  kindness  was  both  acceptable  and  use- 
ful. 

In  conclusion:  the  trustees  are  fully  aware  that  they  have  under- 
taken an  arduous  task;  but  in  the  approbation  of  the  public  author- 
ities, the  countenance  of  their  fellow-citizens,  and  the  increasing 
comfort  of  the  community,  they  will  have  a  full  reward. 

James  Eastbury,  William  Bayard, 

Secretary.  President. 


LIST  OF 

SUPERINTENDENTS  OF  THE 

BANKING    DEPARTMENT    OF    THE 

STATE  OF  NEW  YORK 

(1851-1914) 

SUPEMNTENDENTS  RESIDENCE  APPOINTED 

Daniel  B.  St.  John Newburgh April  15,  185 1 

Marius  Schoonmaker Kingston April  4,  1854 

James  M.  Cook Ballston  Spa January  30,  1856 

Henry  H.  Van  Dyck    Albany April  16,  1861 

Edward  Hand Catskill August  9,  1865 

*Emerson  W.  Keyes Brooklyn November,  1865 

George  W.  Schuyler Ithaca January  3,  1866 

Daniel  C.  Howell Bath February  3,  1870 

DeWitt  C.  Ellis Rochester February  19,  1873 

Henry  L.  Lamb West  Troy August  17,  1877 

A.  Barton  Hepburn Colton April  13,  1880 

Willis  S.  Paine New  York  City April  27,  1883 

*Charles  R.  Hall Norwich October  i,  1889 

Chas.  M.  Preston Kingston December  23,  1889 

Frederick  D.  Kilburn Malone January  8,  1896 

Chas.  H.  Keep Buffalo January  17,  1907 

Clark  Williams New  York  City October  24,  1907 

Orin  H.  Cheney New  York  City November  24,  1909 

Geo.  C.  Van  Tuyl,  Jr Albany May  18,  191 1 

Eugene  Lamb  Richards W.  New  Brighton,  S.I.  May  9,  1914 

*Deputy  and  acting  Superintendent. 


681 


K 


SYNOPSIS  OF  REPORT  OF 

COMPTROLLER  OF  THE  CURRENCY  AS  TO 

SAVINGS  BANKS  IN  THE 

UNITED  STATES 

(from    1820    TO    AND    INCLUDING    I913) 


Year 


1820. 
1825. 
1830. 

1835- 
1840. 

1845- 
1846. 

1847. 
1848. 
1849- 
1850. 
1851. 
1852. 

1853. 
1854- 
i8s5- 
1856. 

i8S7- 
1858. 

I8S9 

i860. 

1861. 

1862. 

1863. 

1864. 

1865. 

1866. 

1867. 

1868. 

1869. 

1870. 

1871. 

1872. 


No.  of 
Banks 


IS 
36 
52 
61 
70 

74 
76 

83 

90 

108 

128 

141 

159 
190 

215 
222 
231 
24s 
259 
278 

285 
289 
293 
30s 
317 
33^ 
371 
406 
476 
517 
577 
647 


No.  of 
Depositors 


8,635 
16,931 
38,03s 
60,058 
78,701 
145,206 
158,709 

187,739 
199,764 
217,318 

251,354 
277,148 
308,863 
365,538 

396,173 

431,602 

487,986 

490,428 

538,840 

622,556 

693,870 

694,487 

787,943 

887,096 

976,025 

980,844 

1,067,061 

1,188,202 

1,310,144 

1 ,466,684 

1 ,630,846 

1,902,047 

1,992,925 


Deposits 


$1,138,576 
2,537,082 

6,973,304 
10,613,726 
14,051,520 
24,506,677 

27,374,325 
31,627,479 
33,087,488 
36,073,924 
43,431,130 

50,457,913 
59,467,453 
72,313,696 
77,823,906 
84,290,076 
95,598,230 
98,512,968 
108,438,287 
128,657,901 

149,277,504 
146,729,882 
169,434,540 
206,235,202 
236,280,401 
242,619,382 
282,455,794 
327,009,452 
392,781,813 
457,675,050 
549,874,358 
650,745,442 
735,046,805 


Average  due 
each  Depositor 


$131.86 
149.84 
183.09 
176.72 

178.54 
168.77 
172.48 
168.46 
165.63 
165.99 
172.78 
182.06 

192.54 
197.82 
196.44 
195-29 
195-90 
200.87 
201 . 24 
206.87 

215-13 
211 . 27 
21503 
232.48 
242.08 

247-35 
264. 70 
283.63 
299 . 80 
312.04 
337-17 
342.13 
368.82 


Average  per  capita 
in  the  U.  S. 


$0.12 


•54 
.82' 


1.87 


4-75 


14.26 


682 


APPENDIX 


683 


No.  of 

No.  of 

Deposits 

Average  due        Ave 

rage  per  capita 

Year 

Banks 

Depositors 

each  Depositor           1 

n  the  U.  S. 

1873.. 

669 

2,185,832 

802,363,609 

367.07          

1874. 

693 

2,293,401 

864,556,902 

376 

98         .  . . . 

1875- 

771 

2,359,864 

924,037,304 

391 

56         .... 

1876. 

781 

2,368,630 

941,350,255 

397 

42 

1877. 

675 

2,395,314 

866,218,306 

361 

63         .  . . . 

1878. 

663 

2,400,785 

879,897,425 

366 

50 

1879. 

639 

2,268,707 

802,490,298 

353 

72 

1880. 

629 

2,335,582 

819,106,973 

350 

71 

16.33 

1881. 

629 

2,528,749 

891,961,142 

352 

73 

1882. 

629 

2,710,354 

966,797,081 

356 

70 

1883. 

630 

2,876,438 

1,024,856,787 

356 

29 

1884. 

636 

3,015,151 

1,073,294,955 

355 

96        .  . . . 

1885. 

646 

3,071,495 

1,095,172,147 

356 

56        . . . . 

1886. 

638 

3,158,950 

1,141,530,578 

361 

36        .  . . . 

1887. 

684 

3,418,013 

1,235,247,371 

361 

39 

1888. 

801 

3,838,291 

1,364,196,550 

355 

41 

1889. 

849 

4,021,523 

1,425,230,349 

354 

40 

1890. 

921 

4,258,893 

1,524,844,506 

358 

03 

24-35 

1891. 

1,011 

4,533,217 

1,623,079,749 

358 

04 

25.29 

1892. 

1,059 

4,781,605 

1,712,769,026 

358 

20 

26.11 

1893- 

1,030 

4,830,599 

1,785,150,957 

369 

55 

26.63 

1894. 

1,024 

4,777,687 

1,747,961,280 

365 

86 

25-53 

1895. 

. 

1,017 

4,875,519 

1,810,597,023 

371 

36 

25.88 

1896. 

988 

5,065,494 

1,907,156,277 

376 

50 

26.68 

1897. 

980 

5,201,132 

1,939,376,035 

372 

88 

26.56 

1898. 

979 

5,385,746 

2,065,631,298 

383 

54 

27.67 

1899. 

987 

5,687,818 

2,230,366,954 

392 

13 

29.24 

1900. 

1,002 

6,107,083 

2,449,547,885 

401 

10 

31-78 

1901 . 

1,007 

6,358,723 

2,597,094,580 

408 

30 

33-45 

1902. 

1,036 

6,666,672 

2,750,177,290 

412 

53 

34  89 

i9<'3- 

1,078 

7,035,228 

2,935,204,845 

417 

21 

36.52 

1904. 

1,157 

7,305,443 

3,060,178,611 

418 

89 

37-52 

1905- 

1,237 

7,696,229 

3,261,236,119 

423 

74 

39-17 

1906. 

1,319 

8,027,192 

3,482,137,198 

429 

64 

41-13 

1907. 

1,415 

8,588,811 

3,690,078,945 

433 

79 

42.87 

1908. 

1,453 

8,705,848 

3,660,553,945 

420 

47 

41.84 

1909, 

1,703 

8,831,863 

3,713,405,710 

420 

45 

41-75 

1910. 

1,759 

9,142,908 

4,070,486,246 

445 

20 

45-05 

1911. 

1,884 

9,794,647 

4,212,583,598 

430 

09 

44.82 

1912. 

1,922 

10,010,304 

4,451,818,522 

444 

72 

46.53 

1913- 

1,978 

10,766,935 

4,727,403,950 

439-07 

48.56 

Population  estimated  at  97,337,000. 


BIOGRAPHICAL   SKETCHES 

OF  OFFICERS 

OF  THE  SAVINGS  BANKS  ASSOCIATION 

OF  THE 

STATE  OF  NEW  YORK 

HAROLD  P.  BREWSTER 

President  of  the  Rochester  Savings  Bank,  was  born  in  Rochester, 
March  27,  1859.  For  more  than  forty  years  he  has  been  identified 
with  the  commercial  Hfe  of  his  native  city,  being  engaged  most  of 
that  time  in  the  tobacco  business.  He  was  elected  a  trustee  of  the 
Rochester  Savings  Bank  in  1889,  and  was  chosen  its  President  in 
February,  1909. 

WILLIAM  G.  CONKLIN 

President  of  the  Franklin  Savings  Bank,  was  born  October  28, 
1848.  On  December  i,  1867,  he  entered  the  Franklin  Savings 
Bank  as  clerk,  and  after  nearly  twenty  years  of  faithful  service 
was  elected  its  Secretary.  He  was  elected  a  trustee  in  February, 
1887.  In  April,  1907,  he  was  promoted  to  the  Presidency  of  the 
Bank  and  still  holds  that  office.  He  is  a  member  of  the  Union 
League  Club,  of  the  Chamber  of  Commerce,  a  hfe  member  of  the 
New  York  Athletic  Club,  a  member  of  the  New  York  Electrical 
Society,  and  the  Press  Club.  He  is  also  a  trustee  of  the  Lincoln 
Trust  Company  and  of  the  Hanaman  Hospital,  and  a  member  of 
the  Fifth  Avenue  Presbyterian  Church  of  the  City  of  New  York. 

JONATHAN  B.  CURREY 

President  of  the  Metropolitan  Savings  Bank,  New  York  City,  was 
born  at  Yorktown,  N.  Y.,  March  9,  1847,  the  son  of  the  Rev. 
Benjamin  and  Susan  (Hart)  Currey.  His  education  was  obtained 
at  private  schools  and  the  Washington  County  Collegiate  Institute. 
He  studied  marine  law  for  six  years  with  Judge  James  S.  Chew,  and 
for  twenty  years  has  practised  adjusting  marine  losses.  Mr. 
Currey  has  been  President  of  the  Metropolitan  Savings  Bank  since 

684 


APPENDIX  68s 

1893;  is  also  a  member  of  the  Board  of  Trustees.  He  was  married 
at  St.  Louis,  Mo.,  April  17,  1894,  to  Miss  Mary  S.,  daughter  of 
Col.  Henry  Clay  Moore.  In  poUtics  Mr.  Currey  is  a  Republican. 
He  attends  the  Protestant  Episcopal  Church  of  the  Incarnation. 
Mr.  Currey  is  a  member  of  the  Average  Adjusters'  Association  of 
the  United  States,  of  which  he  was  chairman  in  1894-95,  and  a 
member  of  the  Chamber  of  Commerce,  the  G.  A.  R.,  and  the  S.  A. 
R.,  and  of  the  Lotos  Club.     His  residence  is  at  Mohegan  Lake,  N.  Y. 

WILLIAM  FELSINGER 

President  of  the  New  York  Savings  Bank,  was  born  July  3,  1852. 
At  the  age  of  seventeen  he  entered  the  New  York  Savings  Bank  as 
junior  clerk.  After  a  service  of  thirteen  years  there,  he  went  to  the 
Greenwich  Savings  Bank,  returning  to  the  New  York  Savings 
Bank  as  Secretary,  June  i,  1891.  On  March  4,  1893,  Mr.  Fel- 
singer  was  elected  a  trustee  of  the  last-named  institution,  and  be- 
came its  President  April  8,  1902,  an  office  which  he  has  since  held. 
Mr.  Felsinger  is  a  member  of  the  Union  League  and  Republican 
clubs  of  the  City  of  New  York. 

CHARLES  E.  HANAMAN 

was  born  in  Port  Schuyler,  Albany  County,  N.  Y.,  November  19, 
1848.  He  prepared  for  college,  but  was  obliged  to  enter  the  busi- 
ness world  in  1865.  He  continued  in  business  as  a  manufacturer 
and  flour  merchant  until  1886,  when  he  was  forced  to  retire  by 
reason  of  ill-health. 

Mr.  Hanaman  accepted  the  office  of  Secretary  and  Treasurer 
of  the  Troy  Savings  Bank  in  February,  1888,  and  became  President 
and  a  trustee  of  the  institution  in  February,  1893.  At  that  date 
the  Bank's  assets  were  about  $6,000,000;  to-day,  figured  on  the 
same  basis,  they  are  over  $13,000,000. 

Mr.  Hanaman,  as  a  recreation  hobby,  has  devoted  much  of  his 
leisure  for  a  number  of  years  to  scientific  (biological)  study. 

FRANK  MOSLEY  HURLBUT 

President  of  the  Union  Square  Savings  Bank,  New  York  City,  was 
born  in  Milan,  Ohio,  in  185 1.  At  the  age  of  sixteen  years  he  entered 
the  services  of  the  Institution  for  the  Savings  of  Merchants'  Clerks, 
the  title  of  which  was  afterward  changed  to  the  Union  Square  Savings 
Bank.     In  1896  he  became  Vice-President,  and  in  1897  President. 

He  succeeded  Mr.  Styles  as  Treasurer  of  the  Savings  Banks  As- 
sociation in  19 10,  and  continued  in  that  office  until  his  death 
January  2, 19 14. 

He  was  a  member  of  the  Player's  Club  in  New  York  City,  and 
of  the  Morris  County  Golf  Club,  at  Morristown,  New  Jersey. 


686  .\PPENDIX 


JAMES  McMAHON 

was  born  in  Franklin  County,  N.  Y.,  October  15,  183 1.  His  edu- 
cation was  acquired  in  Rochester,  N.  Y.,  where  his  parents  re- 
moved in  his  boyhood.  In  1864  he  was  appointed  deputy  grain 
measurer  in  New  York  City,  and  shortly  thereafter,  with  James 
T.  Easton,  organized  the  Protective  Grain  Association,  out  of 
which  the  firm  of  Easton,  McMahon  &  Co.  developed.  Having 
established  a  line  of  freight  steamers  between  New  York  and 
Philadelphia,  the  business  was  reorganized  in  188 1  and  incorporated 
as  the  Easton  &  McMahon  Transportation  Company,  of  which 
Mr.  McMahon  was  president,  until  he  retired  in  1886.  Meanwhile, 
he  had  become  identified  with  the  Emigrant  Industrial  Savings 
Bank  in  New  York  City.  He  was  elected  a  member  of  the  Executive 
Committee  in  1881,  became  Chairman  of  that  Committee  in  1891, 
and  was  chosen  President  of  the  Bank  in  1892,  continuing  in  that 
ofiice  until  his  resignation  in  1906.  Under  his  direction  the  in- 
stitution became  one  of  the  best-known  Savings  Banks  in  New 
York  City.  Mr.  McMahon's  public  life  was  conspicuous  in  the 
two  fields  of  banking  and  philanthropy.  Although  he  had  never 
sought  public  office  he  was  appointed  to  membership  on  several 
important  boards  in  Greater  New  York.  He  served  on  the  Board 
of  Education  and  took  a  prominent  part  in  the  movement  which 
resulted  in  the  consolidation  of  Brooklyn  with  Greater  New  York 
in  1898.  He  served  as  a  director  and  member  of  the  finance  com- 
mittee of  the  Equitable  Life  Assurance  Society  from  1906  to  1912, 
director  of  the  National  Surety  Company,  the  Produce  Exchange 
Bank,  the  People's  Trust  Company  of  Brooklyn,  the  Realty  As- 
sociates of  Brooklyn,  and  other  leading  financial  institutions.  He 
was  a  trustee  of  the  House  of  Good  Shepherd,  a  vice-president  of 
the  Society  for  the  Prevention  of  Cruelty  to  Children,  chairman  and 
vice-president  of  the  finance  committee  of  the  Irish  Emigrant 
Society,  and  an  incorporator  and  director  for  twenty-three  years 
of  the  Brooklyn  Institute  of  Arts  and  Sciences,  of  which  he  became 
a  life  member  m  1890.  He  also  served  a  term  on  the  board  of 
management  of  the  Long  Island  State  Hospital.  Mr.  McMahon 
enjoyed  a  wide  reputation  as  an  educator,  financier,  mathemati- 
cian, and  physicist,  and  received  several  gold  medals  for  his  re- 
search work  in  mental  philosophy  and  literature.  He  possessed  a 
balanced  judgment  and  untiring  industry,  while  his  frank  and 
cheerful  disposition,  the  honesty  and  candor  of  his  nature,  and  a 
warm  alTection  for  his  associates  won  for  him  a  host  of  friends  in 
all  walks  of  life.  He  was  thrice  married:  first,  February  19,  1855, 
to  Katherinc  Augusta  Cummiskey,  of  Rochester,  N.  Y.,  who  died 
May  28,  1895;  second,  June  17,  1896,  to  Rose  Mary  Devereux,  who 
died  July  18,  1909,  and  third,  April  7,  1910,  to  Helena  Devereux,  his 


APPENDIX  687 

deceased  wife's  sister,  receiving  a  special  dispensation  from  the 
Pope  permitting  the  ceremony.  Mr.  McMahon  died  at  his  coun- 
try home  in  Smithtown,  L.  I.,  December  10,  1913.  (National 
Cyclopedia  of  Am.  Biog.:  J.  T.  White  &  Co.,  New  York.) 

EDWIN  P.   MAYNARD 

was  born  in  Brooklyn,  N.  Y.,  July  12,  1864,  and  was  educated  in 
the  public  schools.  At  the  age  of  fifteen  he  entered  the  employ- 
ment of  Ammidon,  Lane  &  Company,  drygoods  commission  mer- 
chants. In  1882  he  went  into  the  employ  of  the  Brooklyn  Savings 
Bank  as  assistant  bookkeeper,  filling  various  positions  up  to  the 
year  1902,  when  he  was  elected  Assistant  Comptroller  of  the  Bank, 
and  a  few  months  later  Comptroller  of  the  institution.  In  191 2 
he  was  elected  President,  to  succeed  Mr.  Bryan  H.  Smith,  deceased. 
This  institution,  as  is  well  known,  is  the  third  oldest  Savings  Bank 
in  the  State  of  New  York  and  the  oldest  on  Long  Island.  In  May 
Mr.  Maynard  became  President  of  the  New  York  State  Savings 
Banks  Association.  Upon  his  election  to  the  presidency  of  the 
Brooklyn  Trust  Company,  in  July  of  the  same  year,  he  resigned 
the  Presidency  of  the  Association,  and  also  that  of  the  Brooklyn 
Savings  Bank,  at  the  same  time  resigning  his  directorship  in  the 
Broadway  Trust  Company. 

At  the  present  time  Mr.  Maynard  is  a  director  of  the  Nassau 
National  Bank  and  of  the  New  York  Telephone  and  Telegraph 
Company,  and  trustee  of  the  Brooklyn  Savings  Bank  and  of  the 
Brooklyn  Trust  Company. 

CHARLES  ADDISON  MILLER 

was  born  at  Utica,  New  York,  December  29,  1867,  the  son  of  Addi- 
son Charles  and  Cynthia  Jervis  (Brayton)  Miller.  He  was  edu- 
cated in  the  public  schools  of  Utica,  at  Trinity  Military  Institute 
at  Tivoli-on-the-Hudson,  and  at  Harvard  College.  Mr.  Miller 
was  graduated  from  college  in  June,  1890,  and  was  admitted  to  the 
bar  in  the  fall  of  1892.  He  began  practice  as  a  member  of  the  firm 
of  Miller,  Fincke  &  Brandegee,  and  has  continued  a  member  of 
that  firm  and  of  its  successor.  Miller  &  Fincke,  until  the  present 
time.  In  January,  1894,  he  became  a  trustee  of  the  Savings  Bank 
of  Utica,  and  at  the  same  time  his  firm  became  the  attorneys  for 
that  institution.  He  became  the  Vice-President  in  1899  and 
President  in  1907.  Mr.  Miller  was  elected  as  a  member  and  as 
Chairman  of  the  Executive  Committee  of  the  New  York  State 
Savings  Banks  Association  in  the  fall  of  1904,  and  immediately 
took  up  the  work  of  endeavoring  to  amend  the  Investment  Law  in 
such  a  way  that  the  securities  in  which  Savings  Banks  might  in- 
vest should  be  given  by  general  rules  and  not  be  established  simply 


688  APPENDIX 

by  legislative  enactment.  This  work  resulted  in  the  amendment 
in  1905  which  standardized  the  securities  for  Savings  Bank  invest- 
ment. Mr.  Miller  was  assisted  in  his  efforts  to  get  this  act  en- 
acted by  the  Legislature  by  Mr.  Van  Rensselaer,  who  was  then 
President  of  the  Association,  without  whose  assistance  there  is 
little  likelihood  that  the  amendment  would  have  been  adopted. 
Mr.  Miller  succeeded  Mr.  Van  Rensselaer  as  President  of  the  As- 
sociation in  the  spring  of  1908,  and  served  for  one  term.  After 
Mr.  Miller  retired  as  President  of  the  Association,  his  firm  was 
retained  as  attorneys  for  ,the  Association  and  has  served  in  that 
capacity  to  the  present  time. 

THOMAS  M.  MULRY 

President  of  the  Emigrant  Industrial  Savings  Bank,  New  York,  is 
one  of  the  stalwart  figures  in  the  financial  life  of  the  metropolis. 
He  was  born  in  New  York  City,  February  5,  1855.  His  father 
was  one  of  five  brothers  who  came  to  this  country  from  Ireland  in 
1873  and  settled  in  New  York  City.  His  mother  was  Mrs.  Par- 
thenia  M.  Corlius,  whose  ancestor,  the  Hon.  Clarkson  Corlius,  was 
a  representative  from  New  York  in  the  State  Legislature  at  Albany 
during  the  early  part  of  the  last  century.  Mr.  Mulry  received  his 
early  education  in  the  Catliolic  parochial  schools;  he  afterward 
spent  one  year  at  the  De  La  Salle  Institute,  conducted  by  the 
Christian  Brothers,  and  was  for  three  years  a  pupil  of  the  night 
school  conducted  at  Cooper  Institute.  The  family  removed  to 
Wisconsin  in  1862,  but  returned  to  New  York  City  nine  years 
later.  Mr.  Mulry  became  interested  in  the  contracting  business 
in  connection  with  his  father,  and  continued  to  pursue  that  calling 
for  many  years.  He  was  elected  a  trustee  of  the  Emigrant  In- 
dustrial Savings  Bank  on  December  12,  1901,  and  served  on  the 
Executive  Committee  of  the  institution  in  1904  and  1905.  In 
January,  1906,  he  was  elected  President.  This  institution,  as  is 
well  known,  is  one  of  the  largest  in  the  world.  Mr.  Mulry  has 
always  been  a  very  busy  man,  being  a  director  of  the  Broadway 
Trust  Company,  the  United  States  Title  Guarantee  and  Indemnity 
Company,  the  Fourteenth  Street  Bank,  and  the  Prudential  Realty 
Company.  He  is  also  a  member  of  the  Mechanics'  and  Traders' 
Exchange,  the  Employers'  Association,  and  other  business  organi- 
zations. In  politics  he  is  a  Democrat  and  a  member  of  Tammany 
Hall,  but  has  uniformly  declined  to  accept  political  office.  Mr. 
Mulry  is  a  member  of  the  Democratic,  Catholic,  Hardware,  Build- 
ing Trados,  and  other  clubs,  and  of  the  Friendly  Sons  of  St.  Patrick 
and  other  social  organizations.  He  is  probably  best  known  to  the 
public  for  the  deep  interest  he  has  always  taken  in  the  charitable 
organizations  of  New  York  City,  particularly  those  connected 
with  the  Roman  Catholic  Church.     He  is  president  of  the  Superior 


APPENDIX  689 

Council  of  the  St.  Vincent  De  Paul  Society,  covering  the  whole 
United  States;  president  of  the  National  Conference  of  Charities 
and  Corrections,  a  member  of  the  Board  of  Governors  of  the  Man- 
hattan State  Hospital,  a  commissioner  of  the  New  York  State 
Board  of  Charities,  and  prominently  identified  with  many  im- 
portant Catholic  institutions.  Mr.  Mulry  is  married  and,  with  his 
family,  lives  at  No.  10  Perry  Street,  New  York  City. 

SAMUEL  R.  RAINEY 

who  died  in  the  city  of  Hudson,  March  17,  1900,  was  one  of  the 
founders  of  the  Savings  Banks  Association  and  up  to  the  time  of  his 
last  illness  one  of  the  most  active  and  influential  in  its  councils. 
From  the  year  1882  to  the  time  of  his  death  he  was  the  Treasurer 
of  the  Hudson  City  Savings  Institution.  He  was  also  one  of  the 
directors  of  the  National  Hudson  River  Bank,  and  during  his  long 
and  active  life  had  been  connected  with  many  enterprises  of  first 
importance.  His  soundness  of  judgment,  large  experience,  and 
knowledge  of  men  and  affairs  enabled  him  to  fill  every  position  he 
occupied  with  distinguished  ability.  For  several  years  he  was  the 
secretary  of  the  board  of  managers  of  the  House  of  Refuge  for 
Women  at  Hudson;  when  steam  fire-engines  were  made  in  Hudson 
Mr.  Rainey  was  the  secretary  and  manager  of  the  Clapp  &  Jones 
Manufacturing  Company,  and  later  he  became  secretary  of  the 
Hudson  Iron  Works.  In  politics,  Mr.  Rainey  was  an  ardent  Re- 
publican, being  for  four  years  and  at  the  time  of  his  death  president 
of  the  Lincoln  Republican  Club  of  Hudson.  He  was  an  elder  of 
the  Presbyterian  Church,  and  for  a  long  time  the  superintendent 
of  the  Sunday-school. 

JOHN  HARSEN  RHOADES,  SR. 

was  one  of  the  best-known  public-spirited  citizens  of  the  metrop- 
olis. To  him  is  due  the  greater  share  of  the  credit  of  estabHshing 
the  Savings  Banks  Association  of  the  State  of  New  York,  an  in- 
stitution in  which  he  ever  took  a  fatherly  pride  and  satisfaction. 
Up  to  the  time  of  his  death,  in  December,  igo6,  Mr.  Rhoades  at- 
tended every  session,  taking  a  leading  part  in  all  discussions  as 
well  as  proposed  reforms,  and  for  many  years  was  the  honored 
President  of  the  organization.  Mr.  Rhoades  was  President  of  the 
Greenwich  Savings  Bank  for  twenty-nine  years,  and  was  an  author- 
ity upon  all  matters  pertaining  to  savings  institutions.  He  was 
frequently  consulted  by  legislators,  and  was  instrumental  in 
bringing  about  many  reforms  which  have  taken  place  in  the  con- 
duct of  these  institutions  in  the  last  twenty  years.  Mr.  Rhoades 
was  a  leader  in  all  reform  movements  for  the  benefit  of  the  City 
of  New  York,  and  was  largely  responsible  for  the  reforms  brought 


690  APPENDIX 

about  by  the  so-called  Lexow  Committee,  one  of  which  was  the 
making  of  the  ofl&ce  of  Sheriff  a  salaried  position  and  stopping  the 
tremendous  graft  which  had  so  long  existed  under  the  fee  system. 
Mr.  Rhoades  held  directorships  in  many  prominent  and  powerful 
financial  institutions,  including  the  Bank  of  North  America,  the 
Lawyers'  Title  Insurance  and  Trust  Company,  the  Madison  Safe 
Deposit  Company,  the  Lincoln  Trust  Company,  the  United  Shoe 
Machinery  Company,  the  United  States  Trust  Company,  and  the 
Washington  Trust  Company.  In  politics  Mr.  Rhoades  was  a 
Republican,  casting  his  first  vote  for  Lincoln.  Among  the  clubs 
and  organizations  in  which  he  had  membership  were  the  Union 
League,  Metropolitan,  Century,  Lotos,  and  City  Lawyers'  clubs, 
the  Municipal  Art  Society,  the  American  Geographical  Society, 
St.  Nicholas  Society,  and  the  Chamber  of  Commerce.  He  was 
vice-president  of  the  Eye  and  Ear  Infirmary,  and  was  interested  in 
other  philanthropic  institutions.  Mr.  Rhoades  was  born  in  New 
York  City,  his  paternal  ancestors  being  of  English  and  Welsh 
stock,  and  his  maternal  of  Dutch  blood.  Starting  in  life  as  a 
clerk  in  a  drygoods  commission  house,  his  rise  was  due  to  his  own 
efforts.  He  always  saved  money,  and  soon  became  recognized  as 
a  capable  business  man  of  integrity.  His  noble  name  he  never 
sullied.  At  the  time  of  his  death  Mr.  Rhoades  was  a  widower.  He 
left  two  daughters  and  a  son,  John  Harsen  Rhoades,  Jr.,  who  is 
following  closely  in  the  footsteps  of  his  honored  father. 

WILLIAM  HEWITT  ROCKWOOD 

President  of  the  Union  Square  Savings  Bank,  New  York  City,  was 
born  in  the  metropolis  in  1856.  He  entered  the  service  of  the 
institution  for  the  Savings  of  Merchants'  Clerks  (now  the  Union 
Square  Savings  Bank)  in  1884,  was  made  its  Secretary  in  1807, 
Vice-President  and  Secretary  in  1898,  and  President  in  191 2.  He 
was  for  a  number  of  years  subsequent  to  1908  treasurer  of  the  West 
End  Association,  New  York  City;  he  also  served  as  Treasurer  of 
the  Savings  Banks  Association  of  the  State  of  New  York  from  191 2 
to  1914.  He  is  a  member  of  the  West  Side  Club  and  the  Seventh 
Regiment  Veteran  Association  of  the  City  of  New  York. 

CHARLES  ADOLPH  SCHIEREN 

manufacturer  and  statesman,  of  30  Ferry  St.,  New  York  City,  was 
born  on  February  28,  1842,  in  Prussia.  In  1856-64  he  was  em- 
ployed in  his  father's  store  in  New  York  City.  Then  for  four  years 
he  was  connected  with  a  belting  factory,  and  in  1868  established 
on  a  small  scale  the  business  now  known  as  the  Charles  A.  Schieren 
Company,  tanners  and  belting  manufacturers,  one  of  the  largest 
in  the  United  States.     He  was  a  trustee  of  the  Brooklyn  Trust  Com- 


APPENDIX  691 

pany  and  a  director  of  the  Germania  Life  Insurance  Company 
and  of  the  Nassau  National  Bank.  In  1894-95  he  was  Mayor  of 
Brooklyn,  N.  Y.;  in  1900-01  he  was  chairman  of  the  New  York 
Commerce  Commission,  and  became  president  of  the  Brooklyn 
Academy  of  Music.  Mr.  Schieren  for  a  num.ber  of  years  held  the 
office  of  First  Vice-President  of  the  Germania  Savings  Bank,  of 
which  he  has  been  a  trustee  since  1886.  He  was  chosen  President 
of  the  Bank  in  1900.  He  died  at  his  home  in  Brooklyn,  March  10, 
1915- 

FREDERIC    B.    STEVENS 

was  born  in  Albany,  N.  Y.,  June  9,  187 1,  and  was  educated  at  the 
Albany  Academy.  Soon  after  leaving  the  Academy  he  entered 
the  National  Savings  Bank  of  the  City  of  Albany,  an  institution 
which  his  father,  Albert  Parsons  Stevens,  helped  to  organize  in 
1869.  He  was  content  to  begin  at  the  lowest  round  of  the  ladder, 
entering  the  bank  in  the  capacity  of  messenger,  January  i,  1888, 
and  rising  to  the  position  of  Treasurer,  which  he  has  held  since 
January  15,  1907;  prior  to  that  time  he  had  been  Secretary  for  two 
years.  Since  December  18,  1911,  Mr.  Stevens  has  been  a  trustee 
of  the  institution.  During  the  years  1910-1913,  inclusive,  he  was 
Secretary  of  the  Savings  Banks  Association  of  the  State  of  New 
York.  He  served  five  years  as  a  member  of  the  Third  Signal 
Corps,  N.  G.  N.  Y.,  part  of  the  time  with  the  rank  of  sergeant. 
He  is  a  member  of  the  Society  of  Mayflower  Descendants,  New 
England  Society  of  the  City  of  New  York,  Society  of  the  Colonial 
Wars,  Albany  Institute  and  Historical  and  Art  Society,  Fort 
Orange  and  Country  clubs,  the  Albany  Chamber  of  Commerce, 
and  the  Albany  Academy  Alumni  Association.  He  is  also  a  life 
member  of  Masters'  Lodge,  No.  5,  F.  &  A.  M.,  of  Albany. 

SAMUEL   D.    STYLES 

late  President  of  the  North  River  Savings  Bank,  New  York  City, 
was  born  in  the  metropolis,  September  25,  1841.  At  an  early 
age  he  entered  business.  In  1865  he  founded  the  printing  business 
of  Styles  and  Cash,  from  which  he  retired  in  1903.  Mr.  Styles 
was  a  director  in  the  West  Side  Bank,  the  Lincoln  Trust  Company, 
and  in  the  Home  Insurance  Company,  being  for  many  years  a 
member  of  the  finance  committee  of  the  last-named  institution. 
He  was  chosen  a  member  of  the  Board  of  Trustees  of  the  North 
River  Savings  Bank,  November  20,  1897,  and  was  elected  President 
of  the  institution,  January,  8,  1894  which  office  he  held  up  to  the 
time  of  his  death,  July  2,  19 10.  Mr.  Styles  served  in  the  capacity 
of  Treasurer  of  the  Savings  Banks  Association  of  the  State  of 
New  York  from  the  year  1903  to  the  time  of  his  death. 


692  APPENDIX 


WILLIAM  BAYARD  VAN  RENSSELAER 

was  born  in  Albany,  N.Y.,  October  4,  1856,  the  son  of  Bayard  and 
Laura  Reynold  Van  Rensselaer,  and  a  direct  lineal  descendant  of 
Kiliaen  Van  Rensselaer,  of  Amsterdam,  Holland.  Had  not  the  laws 
of  New  York  prohibited  the  entailing  of  property,  he  would  have  been 
the  eleventh  Patroon  and  owner  of  the  Rensselaerwyck  property. 
He  attended  the  Boys'  Academy  and  various  other  institutions  of 
learning,  and  matriculated  at  Harvard  in  1875,  being  graduated 
four  years  later.  Subsequently  he  attended  the  Harvard  Law 
School.  Being  admitted  to  the  Bar  in  1882,  he  opened  an  office  at 
No.  25  North  Pearl  Street.  For  many  years  he  had  full  charge 
of  the  Van  Rensselaer  estate,  and  up  to  the  time  of  his  death,  in 
1909,  served  as  Treasurer  of  the  Van  Rensselaer  Land  Company, 
which  he  was  instrumental  in  organizing.  Mr.  Van  Rensselaer 
became  a  director  of  the  New  York  State  National  Bank  in  1885, 
and  was  made  its  Vice-President  in  1900.  He  was  elected  a 
trustee  of  the  Albany  Savings  Bank  in  1883,  Vice-President  in 
1897,  and  upon  the  death  of  J.  Howard  King  was  chosen  its  Presi- 
dent, an  office  which  his  grandfather,  General  Stephen  Van  Rens- 
selaer had  held  when  the  Bank  was  chartered,  March  25,  1820. 
Upon  the  organization  of  the  Union  Trust  Company  he  was  made 
its  Vice-President;  was  the  organizer  of  the  Albany  Terminal 
Warehouse  Company,  a  director  of  the  Cohoes  Company,  which 
supplies  the  great  mills  at  Cohoes  with  water  power;  an  organizer 
and  charter  member  of  the  Fort  Orange  Club;  a  member  of  the 
Albany  Country  Club  and  of  the  Albany  Institute  and  Historical 
and  Art  Society,  of  the  Holland  Society,  and  the  University  Club 
of  the  City  of  New  York,  the  Reform  Club;  one  of  the  trustees  of 
the  New  York  State  Normal  College  and  of  the  Rensselaer  Poly- 
technic Institute,  and  one  of  the  officers  of  the  Albany  Chamber  of 
Commerce.  In  1901  he  was  chosen  Chairman  of  the  Executive 
Committee  of  the  Savings  Banks  Association  of  the  State  of  New 
York,  and  on  May  12,  1904,  was  elected  President  of  that  body, 
because  of  his  widely  recognized  ability  and  conservatism,  serving 
for  four  years.  Among  various  appointments  in  rendering  public 
service  was  his  designation  by  Governor  Morton  on  the  Albany 
Bi-Centennial  Celebration  Committee,  and  his  appointment  by 
Governor  Hughes  as  one  of  the  State's  representatives  on  the 
Hudson-Fulton  Commission  in  1909.  While  in  politics  a  Republi- 
can, Mr.  Van  Rensselaer  not  infrequently  asserted  his  independ- 
ence; he  consistently  refused  to  accept  political  position.  Mr. 
Van  Rensselaer  married,  at  Cambridge,  Mass.,  November  3,  1880, 
Louisa  Greenough  Lane,  a  daughter  of  Prof.  George  Martin  Lane, 
of  Harvard  University. 


APPENDIX  693 


WILLIAM  H.  S.  WOOD 

was  bom  in  New  York  City  in  April,  1840,  the  son  of  William 
and  Mary  (Underhill)  Wood,  and  grandson  of  Samuel  Wood,  who 
founded  our  business  in  1804.  He  was  educated  at  the  College 
of  the  City  of  New  York  and  at  Haverford  College  (Pa.),  and 
entered  the  business  in  1859.  In  1865  he  married  Emma,  daughter 
of  Gilbert  Congdon,  of  Providence,  R.  I.  He  died  on  December 
II,  1907,  leaving  four  children:  William  C,  Gilbert  C,  Arnold,  and 
Mary. 

For  forty-eight  years,  and  until  his  death,  he  was  actively  en- 
gaged in  the  business  of  William  Wood  &  Co.,  publishers  of  medical 
books,  most  of  that  time  as  senior  partner.  In  1903  he  was  elected 
President  of  the  Bowery  Savings  Bank,  which  position  he  held 
until  the  time  of  his  death.  He  took  an  unusual  interest  in  the 
affairs  of  the  Bowery  Savings  Bank,  and  of  Savings  Banks  gener- 
ally. He  brought  great  energy  and  considerable  originality  into 
the  conduct  of  this  Bank,  and  under  his  Presidency  the  deposits  of 
the  Bowery  Savings  Bank  passed  the  $100,000,000  mark.  He 
especially  endeavored  to  have  the  franchise  tax  on  the  surplus  of 
Savings  Banks  abolished. 

He  was,  at  various  times,  a  trustee  of  the  Young  Men's  Christian 
Association,  of  the  American  Bible  Society,  of  the  Bowery  Savings 
Bank,  an  incorporator  of  the  New  York  Botanical  Garden,  and  a 
member  of  a  great  many  scientific  societies  and  of  several  clubs. 

His  chief  recreations  were  yachting  and  horticulture,  his  coun- 
try place  at  Greenwich,  Conn.,  having  the  largest  collection  of 
herbaceous  plants  in  the  State.  He  was  a  birthright  member  of 
the  society  of  Friends  (Quakers). — William  C.  Wood. 


694 


APPENDIX 


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INDEX 


Advantages  to  Savings  Banks  of  Con- 
certed Action  in  the  Purchase  of 
Municipal  Bonds — Address  by  An- 
drew Mills,  58 

Advertising,  bank,  413 

Aggregate  resources  of  Savings  Banks 
in  State  of  New  York,  Jan.  i,  1914, 

559- 
American  Law  Review,  extract  from, 

Sii 

"Amortization,"  Chas.  E.  Sprague, 
406 

Amount  due  depositors  of  Savings 
Banks  in  New  York  State  (1913), 
559.  Open  accounts  in  Savings 
Banks  in  New  York  State  (19 13), 

559 
Appendix,  565 
"Aristocracy    of    the    Dollar,"    Col. 

Thos.   Wentworth   Higginson,    199 
Assets  of  banks  invested  in  railroad 

bonds,  method  of  computing,  385 
Astor,  John  Jacob,  early  advertising 

issued  by,  330 
Atkinson,    Edward,   address.    Fourth 

Annual  Convention,  90 
Attorney  General,  opinion  of,  on  right 

of  trustees  to  use  surplus  for  the 

purpose    of    paying    dividends    in 

excess  of  amount  actually  earned, 

217 
Average    amount   of   Savings   Banks 

accounts  in  New  York  State,  559 


B 


Baltimore,  establishment  of  branch 
banks  in,  500 

Bank  advertising,  413. 

Bank  bookkeeping,  uniformity  in,  35 

Bank  for  Savings,  New  York,  pre- 
amble to  the  charter  of,  in  1819,  221 

Bank  for  Savings,  New  York,  first 
report    (1820),    666 

Banking  Law  Revision,  560 

Banking  Law  Revision,  personnel  of 


commission,  560 


Banking  power  of  New  York  State, 
558 

Banking  System,  valuable  informa- 
tion pertaining  to,  558 

Banks  doing  a  savings  and  commercial 
business  combined,  504 

Banks,  number  of,  in  the  Association 
in  year  1899,  152 

Banks  represented  at  initial  meeting, 

.27 

Bimetallists,  claims  of,  131 

Bond  and  Mortgage  Investments  of 
Banks  of  New  York  State,  75 

Brewster,  Harold  F.,  biographical 
sketch  of,  674 

Biographical  sketches  of  officers  of 
the  Savings  Banks  Association  of 
the  State  of  New  York,  674 

Bloodgood  Bill,  provisions  of,  6 

Bonds  Authorized  for  the  City  of 
New  York,  List  of,  70 

Bond  Investments  of  Savings  Banks, 
Andrew  Mills,  388;   statistics,  388 

Bonds  of  the  City  of  New  York,  Sav- 
ings Banks  investments  in,  416 

Bonds,  of  the  City  of  New  York,  sold 
since  Jan.  i,  1897,  70 

Bowery  Savings  Bank,  deposits  of,  130 

Branch  Banks,  advocacy  of,  E.  J. 
HiU,  239 

Brewster,  Harold  P.,  appointment 
as  member  of  Executive  Committee, 
533;  remarks  of,  as  President- 
elect, 541;  remarks  of,  as  Presi- 
dent (1912),  550 

Brooklyn,  debt  of,  43 

Bryan,  WUliam  J.,  remarks  as  to  free 
silver,  128 

Bucket  shops  and  poolrooms,  dele- 
terious effect  of,  326 

By-laws,  amendment  of,  so  as  to  per- 
mit of  the  Group  System,  546 


California,  new  banking  law  adopted 

by,  473 
Capital  the  chief  means  of  protecting 
lives  of  dependents,  176 


697 


698 


INDEX 


Capital  and  Labor,  relations  of,  84 

Centennial  of  Savings  Bank  move- 
ment in  the  United  States,  celebra- 
tion of,  523,  524 

Chalmers,  Dr.,  remarks  on  the  value 
of  capital,  197 

Cheny,  O.  H.,  address  (1910),  494; 
(1911),  522 

Chicago,  Rock  Island  &  Pacific  R.  R., 
purchase  of  bonds  of,  by  Savings 
Banks  of  New  York,  311 

Civilization,  meaning  of,  171 

Civilization,  reasons  for  slow  progress 
of,  174 

Civil  War,  operation  of  tax  on  Sav- 
ings Banks  during,  118 

Committee  appointed  to  go  to  Wash- 
ington, D.  C.,  to  present  objections 
to  proposed  national  legislation  on 
Savings  Banks,  124 

Committee  to  go  to  \\^ashington  to 
protest  against  proposed  war  rev- 
enue tax  on  Savings  Banks,  150 

Comptroller  of  the  Currencj',  re- 
port of,  as  to  Savings  Banks  in  the 
United  States  (from  1820  to  and 
including   1913),   672 

Conant,  Charles,  address,  327 

Conklin,  William  G.,  biographical 
sketch  of,  674;  Secretary,  109; 
retirement  as  Secretary,  414 

Constitution  (first)  of  the  Savings 
Banks  Association  of  the  State  of 
New  York,  660;  (present),  662; 
amendment  of,  315 

Conventions  of  the  Savings  Banks 
Associations  of  the  State  of  New 
York:  First  (1894),  3;  Second 
(1895),  30;  Third  (1896),  39; 
Fourth  (1897),  63;  Fifth  (1898), 
109;  Sixth  (1899),  143;  Seventh 
(1900),  185;  Eighth  (1901),  211; 
Ninth  (1902),  227;  Tenth  (1903), 
245;  Eleventh  (1904),  304;  Twelfth 
(i905)>  337;  thirteenth  (1906), 
360;  Fourteenth  (1907),  385; 
Fifteenth  (1908),  414;  Sixteenth 
(1909),  455;  Seventeenth  (1910), 
486;  Eighteenth  (1911),  516; 
Nineteenth  (191 2),  532;  Twentieth 
(1913),  550 

Coombs,  Wm.  B.,  address  (1907),  422 

Counsel  to  the  Savings  Banks  Asso- 
ciation of  the  State  of  New  York, 

Counties  in  New  York  State  without 
Savings  Banks,  332,  502 


Crawford,  Judge  M.  L.,  Dallas,  Tex., 
address  on  "Sound  Money,"  124 

"Crime  of  '73,"  131 

Crown  Point  Mine,  output  of,  128 

Currey,    Jonathan    B.,    biographical 
sketch,  674 

D 

Department  Stores,  origin  and  mean- 
ing of ,  173 
Depositors  in  Savings  Banks,  amounts 

due  to  (1892),  198 
Depositors  in  Savings  Banks  of  the 

State  (1902),  227 
Deposits,  legal  investment  of,  6 
Deposits   in    Savings    Banks   of    the 

State  of  New  York,  Jan.  i,  1890,  185 
Deposits  in  Savings  Banks  of  the  State 

of  New  York  (1901),  211 
Deposits   in    Savings    Banks   of    the 

State  (1902),  227 
Deposits   in   Savings   Banks    of    the 

State  of  New  York  (1903),  245 
Deposits  in  Savings  Banks  of  Eng- 
land,  246 
Dingley,  Governor,  123 
Dividend  rate,   proposed  uniformity 

of,  417  . 

Dividends     paid     to     depositors     in 

Savings    Banks   in    State   of   New 

York  (1913),  559 
Dix,     William     Frederick,     address 

(1910),  506     _ 
"Does  Advertising  pay  for   Savings 

Banks?"  Wm.  H.  S.  Wood,  330. 
Dogmas,  some  false,  171 
Dormant  Accounts,  remarks  on,  by 

Mr.  Hurlbut,  224 
Dormant  Accounts,  remarks  on,  by 

Bryan  H.  Smith,  154 


Edwards,  Judge,  Hudson,  N.  Y.,  151 
Edwards,  John  B.,  Death  of,  44 
Eighteenth  Annual  Convention  (191 1), 

Eighth    Annual    Convention    (1901), 

211 
Eleventh  Annual  Convention  (1904), 

304 
Elmira  Savings  Bank  case,  35 
Executive  Committee,  first  appointed, 

5 
Executive  Committee  which  recom- 
mended formation  of  an  Associa- 
tion, composition  of,  1 1 


INDEX 


699 


Executive  Committee,  report  for 
1898,  112;  for  1899,  150;  for  1901, 
213;  for  1902,  231;  for  1903,  248; 
for  1904,  307;  for  1905,  339;  for 
1907,  417;  for  1910,  486,  for  1913, 
5S2 

F 

Fairchild,  Charles  S.,  address  on 
"The  Relation  of  Savings  Bank 
Deposits  to  General  Business," 
165. 

Federal  Reserve  Act,  bearing  of, 
upon  New  York  Banking  Law 
revision,   562 

Felsinger,  William,  biographical 
sketch  of,  675 

Fiat  Money,  no  room  for,  in  a  gold 
standard  system,  235 

Fifteenth  Annual  Convention  (1908), 
414 

Fifth  Annual  Convention  (1898),  109 

Financial    Stringency,   a   time   of,   4 

First   Annual   Convention    (1894),   3 

First  Report  of  The  Bank  for  Savings 
in  the  City  of  New  York  (1820), 
666 

Fourteenth  Annual  Convention 
(1907),   384 

Formation  of  an  Association  favored, 
II 

Fourth  Annual  Convention  (1897), 
63 

France,  Bank  of,  branch  banks  main- 
tained by,  239 

France,  per  capita  debt  of,  366 

Franchise  Tax,  proposed  repeal  of, 
317,  343,  362 

Free  Silver,  how  demand  for,  origi- 
nated, 128 


"Greenback,"  cost  of  maintaining, 
since  resumption  in  '79,  236 

Group  System,  adoption  of,  546,  547, 
548,  549 

H 

Hart,  A.  E.,  Hartford,  Conn.,  "Tax- 
ation of  Deposits,"  n6 

Hanaman,  Charles  E.,  address  as 
President  (1910),  488;  address 
as  President  (1912),  532;  annual 
address  as  President  (19x1),  516; 
biographical  sketch  of,  675; 
"Theory  and  Practice  of  Savings 
Banks,"  -]']] 

Hawley,  Governor,  sentiments  of,  as 
to  sound  money,  133 

Herrick,  Myron  T.,  address  on  "Postal 
Savings  Banks,"  134 

Higgins,  Gov.  Frank  W.,  appreciation 
of  services  of,  340 

Hill,  E.  J.,  address  on  "Sound 
Money,"    232 

Higginson,  Thomas  Wentworth,  ad- 
dress on  "The  Aristocracy  of  the 
Dollar,"  199 

High  rate  of  interest,  objections  to, 

535 

House  Bill,  10,100;  Action  by  Con- 
gress on,  116 

Humphrey,  Hon.  L.  H.,  116,  153; 
death  of,  228 

Hun,  Marcus  T.,  selected  as  resident 
agent  in  Albany,  30;  address  on 
"Mortgage  Tax  JBill,"  276 

Hurlbut,  Frank  M.,  biographical 
sketch,  675;  appointment  as 
Treasurer,  516;  election  as  Treas- 
urer,   522;  death   announced,    532 


Gage,  Ljonan  J.,  attitude  of,  toward 
Sound  Money,  233;  remarks  on 
Sound  Money,  241 

George,  Henry,  i68 

German  Imperial  Bank,  branches 
maintained  by,  240 

Gold  Standard,  Association  rallies 
to  support  of,  39 

Gold  Standard,  battle  for  the,  133 

Gold  Standard,  Resolutions  as  to,  140 

Grady  BiU  (S.  B.  No.  1608),  oppo- 
sition to,  524 

Grant,  President  Ulysses  S.,  message 
to  Congress  on  "Sound  Money,"  128 


Income  Tax,  Federal,  resolution  in 

opposition   to,  488 
Incorporators    (original)    of    Savings 

Banks  in  New  York  State,  565 
Individual  Action  of  Members  of  the 

Association,  discouragement  of,  229 
Industrial  Virtues,  what  they  are,  175 
"Influence  of  Savings  Banks  in  the 

Community,"  John  R.  Van  Wormer, 

265 
Initial  meeting  of  Association,  banks 

represented  at,  3 
Interest  rate,  competition  of  banks  as 

to,  491 
Interest,  rate  of,  facts  as  to,  179 


700 


INDEX 


Investments,  bill  to  enlarge  the  scope 
of,  147 

Investments,  efforts  to  enlarge  the 
scope  of,  5 

Investments  of  Savings  Banks  of  New 
York,  volume  of,  75 

Investments  by  Savings  Banks,  pro- 
posed changes  in  law  regulating, 
340 

J 

Jackson,  General,  signer  of  bill  to 

restore    gold    currency,    131 
Jacobs,  J.  J.,  Hartford,  Conn.,  ad- 
dress, 122 
Jay,  Pierre,  address  (1910),  497 
Jefferson,  Thomas,  declaration  of,  133 
Johnson,  John  A.,  address,  460 
Jones,  Senator  (Nevada),  128 


Keep,  Charles  H.,  address  (1907), 
402 

Kilburn,  Hon.  F.  D.,  address,  49; 
address.  Fourth  Annual  Conven- 
tion, 78;  address,  as  Supt.  of 
Banking  Department,  137;  address 
as  Supt.  of  Banking  Department 
(1899),  161;    address  of  (1904),  311 

King,  J.  Howard,  remarks  on  "Dor- 
mant Accounts,"  158;  death  of ,  213 

Krum  Bill,  when  became  a  law,  231 

Krum,  Senator  Hobart,  152 


Labor  and  self  denial,  how  they  build 

up  capital,  174 
Land  Banks,  Statistics  as  to,   107 
Lansing,  A.  T.  F.,  address  on  "Banking 

Methods,"  232 
Legislation,  vigilant  watching  of,  34 
Levey,  Edgar  J.,  address,  459 
Lincoln,  Abraham,  anecdote  of,  358 
List  of  Savings  Banks  in  the  State  of 

New  York,  arranged  in  the  order 

of  their  incorporation,  with  original 

incorporators,    565 
List  of  Savings  Banks  in  the  State  of 

New  York,  arranged  alphabetically, 

587 
London,  branch  banks  maintained  in, 

240 
London  Times  on  "National  Money 

Boxes,"  246 


M 


McEwAN,  James  B.,  Senator,  attitude 
of,  as  to  bills  affecting  Savings 
Banks,  153 

McMahon,  James,  remarks  on  "Dor- 
mant Accounts,"  159;  biographical 
sketch,  676 

Maine,  blowing  up  of  battleship, 
109 

Manning,  James  H.,  on  "The  Safe 
and  Sane  Rate  of  Interest,"  525 

Market  value  of  securities,  standard- 
ization of,  526 

Massachusetts,  banking  law  of,  per- 
mitting establishment  of  branches, 
500;   Deposits  in  Savings  Banks  of, 

94,  ,98 

"Maximum  Accounts,"  address  by  Mr. 
C.  E.  Sprague,  61 

Maynard,  Edwin  P.,  address,  479; 
biographical  sketch,  677;  address 
as  President,  555 

Members  of  the  Savings  Banks 
Association  of  the  State  of  New 
York,  arranged  by  groups,  614 

Miller,  Addison  C,  death  of,  32 

Miller,  Charles  A.,  letter  from,  335; 
choice  of,  as  President,  424;  ad- 
dress as  President  (1909),  455; 
biographical  sketch  of,  677;  ad- 
dress on  the  "Restriction  of  Savings 
Bank  Deposits,"  221 

Mills,  Andrew,  address  at  Third 
Annual  Convention,  58;  "Bond 
Investments  of  Savings  Banks," 
388;  retirement,  as  President  of  the 
Association,  207;  remarks  on 
"Dormant  Accounts,"  157;  ad- 
dress as  President,  1901,  211;  ad- 
dress (1907),  426 

Morris,  Robert,  financier  of  the  Revo- 
lution,   declaration    of,    127 

Morris,  Robert  C,  address  on  "Mort- 
gage Tax  Bill,"  270 

Minimum  value  surplus,  action  on 
bill  to  estabhsh,  533 

Mortgage  Bonds  of  Railroads,  invest- 
ment in,   152 

Mortgage  Ta.\-  Bill,  resolutions  in 
opposition  to,  182;  attitude  of  the 
Association  as  to,  183;  joint  legis- 
lative hearing  on,  270 

Mortgages,  Charles  L.  Stone,  304; 
Savings  Banks  investments  in,  398 

Mortgage  taxation  in  California,  187 

Mortuary  Record,  636 


INDEX 


701 


Mulry,  Thomas  F.,  election,  as  Presi- 
dent, 458 

Mulry,  Thomas  M.,  biographical 
sketch,  678 

Mullin  Bill,  Provisions  of,  6 

Municipal  Securities  held  by  Savings 
Banks  of  the  State,  Jan.  i,  1893, 
list  of,  9 

Municipalities  (N.  Y.),  indebtedness, 
10,  145,  146 

Mutual  Savings  Banks,  number  in  the 
United  States,  123 

N 

Ninth  Annual  Convention  (1902),  227 
Nineteenth       Annual        Convention 

(1912),  532 
New  York  City,  accounts  and  methods 

of  Dept.  of  Finance,  416;    finances 

of,  421 
"New  York  City's  Credit,"  Frank  A. 

Vanderlip,  363 
New  York  City,  debt  of,  by  whom 

held,  114 
New  York  City,  net  funded  debt  of, 

461 
Nominating  Committees  (1894-1914), 

634 
Number   of    Savings    Banks   in    the 
State  of  New  York  (1913),  559 

O 

Organization  of  Association,  dis- 
cussion over,   12 

Officers  of  the  Savings  Banks  Asso- 
tion  of  the  State  of  New  York, 
(1894-1914),  617;  biographical 
sketches  of,  674 

Officers,  first  list  of,  26 

Original  incorporators  of  Savings 
Banks  in  State  of  New  York,  565 


Panics,  strengthening  banks  during, 

Parsons,  Prof.,  Boston  University  of 

Law,  130 
Peckham,    Wheeler    H.,    address    on 

proposed  taxation  of  Savings  Banks, 

202 
Per  capita,  Debt  of  France,  366 
Philadelphia,  Building  Acts  of,  102 
Philadelphia    Saving    Fund    Society, 

deposits   and    withdrawals    (1907), 

41S 


Plehn,  Carl  C,  on  mortgage  taxation, 

188 
Postal  Savings  Banks,  65;  address  on, 

by   Col.   Myron  T.   Herrick,    134; 

growth  of,  544 
Poverty,  projects  to  abolish,  177 
"Power  and  Beneficence  of  Capital," 

address     by     Prof.     William     G. 

Sumner,  Yale  University,  167 
Proposed  Taxation  of  Savings  Banks, 

address  by  Wheeler  H.  Peckham, 

202 


Railroad  bonds,  passage  of  first  law 
authorizing  investment  in,  398; 
classification  of,  390;  legal  restric- 
tions, 393;  legality  of  as  Savings 
Investments,  115;  Banks,  refunding 
operations,  391 

Railroad  rates,  resolution  in  oppo- 
sition to  fixing,  by  Interstate  Com- 
merce Commission,  351 

Rainey,  Samuel  R.,  biographical 
sketch  of,  679;  death  of,  189; 
Resolutions  on  death  of,  190; 
Services  of,  recognized  by  the 
Association,  51 

"Reform  in  Currency  and  Banking," 
Prof.  Taussig,  Harvard  University, 

373 

Relation  of  Savings  Bank  Deposits 
to  General  Business,  address  by 
Charles  S.  Fairchild,  165 

Report  of  the  Comptroller  of  the 
Currency  as  to  Savings  Banks  in 
the  United  States  (from  1820  to  and 
including   1913),   672 

Restriction  of  Savings  Bank  Deposits, 
Charles  A.  Miller,  221;  resolution 
regarding,  223 

Rhodes,  Bradford,  resolutions  offered 
by,  on  the  encouragement  of  thrift 
among  the  people,  141 

Rhoades,  John  Harsen,  address  as 
first  President  (1895),  31;  as  Presi- 
dent (1896),  39;  as  President  (1897), 
63;  as  President  (1898),  109;  as 
President  (1899),  143;  as  President 
(1900),  185;  retirement  from  the 
office  of  President  of  the  Associa- 
tion, 189,  193,  195;  address  on 
"Mortgage  Tax  Bill,"  295;  letter 
from,  318;  biographical  sketch, 
679;  death  announced,  384;  reso- 
lutions of  respect,  386 


702 


INDEX 


Rhoades,  John  Harsen,  Jr.,  address, 

430 
Rockwood,  William  H.,  appointment 

as    Treasurer,    532;       biographical 

sketch,  680 
Rogers,  Harris  G.,  death  of,  ^;i 
Russian   Empire,   lack   of  discontent 

in,    168 


Savings  Banks  Association  of  the 
State  of  New  York  (The),  members 
of,  arranged  by  groups,  614; 
officers  of  (1894-1Q14),  617 

Sanger,  Col.  William  Carey,  address 
of,  355 

Savings  Bank  Depositor,  a  hero  of 
Civilization,  175 

Savings  Bank  Deposits,  Taxation  of, 

Savings  Banks  in  small  areas,  con- 
gestion of,  534 

Savings  Bank  insurance,  507 

Savings  Bank  laws  and  conditions, 
lack  of  uniformity  in,  467 

Savings  Bank  Statistics  (1906),  360- 
361 

Savings  Banks  of  New  York,  Statis- 
tics as  to,  163 

Savings  Bank  Statistics  for  England, 
246 

Savings  Bank  System,  ways  of  ex- 
tending, 499 

Savings  deposits,  aggregate  in  the 
United  States,  559;  total  in  the 
United  States,  468 

"Savings  Institutions  as  a  Social 
Force,"  by  Carroll  D.  Wright,  195 

Schieren,  Charles  A.,  address  on 
"Mortgage  Tax  Bill,"  275;  address 
as  President  (1903),  245;  annual 
address  as  President  (1904),  304; 
biographical  sketch  of,  680;  elec- 
tion of,  as  President  of  the  Asso- 
ciation,   227; 

School  Savings  Banks,  authorization 
of,  310 

Searing,  John  W.,  151 

Second  Annual  Convention  (1895),  30 

Senate  Bill  No.  97,  hearing  on,  before 
joint   legislative   committee,    183 

Seventh  Annual  Convention  (1900), 
i8s 

Seventeenth  .\nnual  Convention 
(1910),   486 

SLxth  Annual  Convention  (1899),  143 


Sixteenth  Annual  Convention  (1909), 

455 

"Sixty-day  rule,"  428 

"Sound  Money,"  address  by  Hon. 
E.  J.  Hill,  Connecticut,  232;  ad- 
dress by  Judge  M.  L.  Crawford, 
Dallas,  Tex.,  124;  resolution  in 
reference   to,   46 

Social  disease,  character  and  nature 
of,  177 

Smith,  Bryan  H.,  remarks  on  "Dor- 
mant   Accounts,"    154 

Sprague,  Chas.  E.,  address  on  "Maxi- 
mum Accounts,"  61;  "Amortiza- 
tion," 406;  '"Amortization,"  facts 
as  to,  45 1 ;  death  of,  announced,  53  2 ; 
Paper  on  "Uniformity  in  Bank 
Bookkeeping,"   35 

State  Banks  and  trust  companies, 
resources  of,  558 

Statistics  from  Annual  Report  of 
Superintendent  of  Banks  of  New 
York  (1913),  684 

Statistics  of  Savings  Banks  in 
State  (1903),  305 

Stevens,  Frederic  B.,  biographical 
sketch,  6qi 

Stimson,  Henry  L.,  address  on  "Mort- 
gage Tax  Bill,"  271 

Stone,  Charles,  address  on  "Mortgage 
Tax  Bill,"  289;     "Mortgages,"  304 

Stranahan  Bill,  efforts  to  defeat  the, 
191;  special  meeting  called  to  con- 
sider, 182 

Stryker,  President,  Hamilton  Col- 
lege, address  of,  353 

Sturges,  William  P.,  election  of,  as  mem- 
ber of  Executive    Corrmiittee,  459 

Styles,  Samuel  D.,  biographical  sketch 
of,  681;  death  of,  announced,  516 

Superintendents  of  Banking  Dept., 
State  of  New  York,  list  of  (1851- 
1914),   671 

Superintendent  of  Banks  of  New  York, 
Statistics  from  the  Annual  Report 
of,  for  the  year  1913,  684 

Sumner,  Prof.  William  G.,  Address 
on  "The  Power  and  Beneficence 
of  Capital,"  167 

Surplus,  annual  decrease  in,  495 

Surplus,  income  from,  484 ;  increase 
in,  resolution  in  favor  of,  531; 
minimum,  established  by  legisla- 
tion, resolution  in  favor  of,  525; 
proper  method  of  estimating,  434; 
to  be  more  highly  regarded  than 
interest  rate,  520 


INDEX 


703 


Surplus  or  Guarantee  Fund  of  Sav- 
ings Banks  (The),  by  Mr.  Hicks, 
213 

T 

Taussig,  Prof.,  Harvard  University, 
"Reform  in  Currency  and  Bank- 
ing," 373 

Taxation  of  Deposits,  address  of  Mr. 
A.  E.  Hart,  Hartford,  Conn.,  116; 
resolution  of  the  Association  with 
reference  to,  119 

Tax  on  Guarantee  Fund  of  Savings 
Banks,  passed  by  Legislature,  212 

Taxation  of  Savings  Bank  Deposits, 

73 
"Taxation  of  Savings  Banks,"  Wm. 

H.  S.  Wood,  315 
Tenth    Anniversary   of   the   Associa- 
tion (1903),  245 
"Theory    and    Practice    of    Savings 

Banks,"  address  by  Chas.  A.  Hana- 

man,   444 
"Theory    and    Practice    of    Savings 

Bank  Insurance,"  address  by  Wm.  F. 

Dix,  508 
Third  Annual  Convention  (1896),  39 
Thirteenth  Annual  Convention  (1906), 

360 
Torrens  System  of  Registering  Land 

Titles,   103 
Townsend,  J.  P.,  address,  52 
Trenholm,  Hon.  William  L.,  address, 

Fourth  Annual  Convention,  80 
Trimble,  Merritt,  remarks  with  refer- . 

ence  to  taxation  of  deposits,  120 
Trust    Accounts    aggregating    more 

than  $3,000,  556 
Trusts  and  Combinations,  meaning  of, 

173 
Trustees,  removal  of  objectionable,  475 
Tweed  Ring,  lessons  taught  by,  368 
Twelfth   Annual   Convention   (1905), 

337 
Twentieth  Annual  Convention  (1913), 

550 

U 

Uniformity  in  Bank  Bookkeeping,  35 


Vanderlip,  Frank  A.,  "New  York 
City's  Credit,"  363 

Van  Rensselaer,  William  B.,  address 
as  President,  337;  biographical 
sketch  of,  683;  third  annual  ad- 
dress as  President,  384;  election 
of,  as  President,  318;  fourth 
annual  address  as  President,  414; 
retirement  of,  as  President,  414 

Van  Tuyl,  George  C,  Jr.,  appoint- 
ment of,  as  Supt.  of  Banking,  527; 
letter  from  (191 2),  541 

Van  Wormer,  John  R.,  "Influence  of 
Savings  Banks  in  the  Community," 
265 

Villages,  bonds  of,  how  carried,  145 


W 


War  between  Spain  and  the  United 
States,    III 

War  Revenue  Tax,  Exemption  of 
Savings  Banks  from,  109 

Western  Savings  Banks,  nature  of, 
66 

Wickersham,  George  W.,  employment 
as  counsel,  182,  184;  opinion  as 
attorney,  113 

Williams,  Clark,  address,  475;  ad- 
dress (1907),  419;    address  (1912), 

535 

White,  Horace,  "The  Currency  Ques- 
tion," 249 

Wood,  Wm.  H.  S.,  "Does  Advertis- 
ing Pay  for  Savings  Banks?"  330; 
biographical  sketch,  682;  "Taxa- 
tion of  Savings  Banks,"  315 

Woodford,  Stewart  L.,   address,  324 

Wooster,  Henry  R.,  150 

Wright,  Carroll  D.,  address  on  "Sav- 
ings Institutions  as  a  Social  Force," 

195 
Wright,  Judge  M.  L.,  decision  of,  as 
to  Savings  Banks  deposits,  subject 
to  taxation,  151 


THE  COUNTRY  LIFE  PRESS 
GARDEN  CITY,  N.  Y. 


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